Beach Oil is considering drilling a new oil well that is initially expected to produce oil at a rate of 10 million barrels per year. Beach Oil has a long-term contract that allows them to sell the oil at a profit of $2.50 per barrel (assume at the end of each year). The initial cost of the drilling rig is $175,000,000 and in 2 years time another $20,000,000 is required to be invested to optimize the production of oil. If the rate of oil production from the rig declines by 3% per year and the discount rate is 9% per year, then the NPV of this new oil well is closest to: A) -$333,333,000 B) $16,499,733 C) $33,333,000 D) $39,340,000 E) None of the above

Beach Oil is considering drilling a new oil well that is initially expected to produce oil at a rate of 10 million barrels per year. Beach Oil has a long-term contract that allows them to sell the oil at a profit of $2.50 per barrel (assume at the end of each year). The initial cost of the drilling rig is $175,000,000 and in 2 year's time another $20,000,000 is required to be invested to optimize the production of oil. If the rate of oil production from the rig declines by 3% per year and the discount rate is 9% per year, then the NPV of this new oil well is closest to: A) -S333,333,000 B) $16,499,733 C) $33,333,000 D) $39,340,000 E) None of the above