Consider the following drilling investment:

The lease costs $200,000 and has to be paid for all cases at time zero.

Drilling will cost $500,000 at the end of year 1 for all cases at time zero.

Here are possible cases:

Failure: There is 75% probability that well is a dry hole. In this case no money is made and abandonment cost of 100,000 dollars has to be paid at the end of year 2 and project ends.

Success: Drilling is successful and well is a producer. In this case:

With 40% probability producer well yields the income of $600,000 per year for the next 9 years (from year 2 to year 10).

With 60% probability producer well yields the income of $400,000 per year for the next 14 years (from year 2 to year 15).

Calculate the Expected NPV for minimum ROR 8% and conclude if this is a good investment.