Petroleum Inc. controls offshore oil leases. It is considering the construction of a deep-sea oil rig at a cost of $500 million. The price of oil is $100/bbl. and extraction costs are $50/bbl. PI expects costs to remain constant. The rig will produce an estimated 1,200,000 bbl. per year forever. The risk-free rate is 10% per year, which is also the cost of capital. Suppose that oil prices are uncertain and are equally likely to be $120/bbl. or $80/bbl. next year. Calculate today's NPV of the project.

Please write out the formula. For example:

Annual cash Flow= (Selling price - cost per bbl) x number of bbl's per year

Do not use excel to explain cause I will downvote. Excel confuses me when it is explained