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An oil well presently produces 80,000 barrels per year. It will last for 20 years more, but the production will fall by 5% per year.
An oil well presently produces 80,000 barrels per year. It will last for 20 years more, but the production will fall by 5% per year. Oil prices are expected to increase by 2% per annum. Currently the price of oil is $75 per barrel.
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To calculate the present value of the wells production you can use the discounted cash flow DCF form...
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Management Accounting
Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu
6th Canadian edition
013257084X, 1846589207, 978-0132570848
