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Please solve the question with EXCEL and try to provide the formulas Thank you An oil field development project proposes the investment amounts and daily
Please solve the question with EXCEL and try to provide the formulas
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An oil field development project proposes the investment amounts and daily oil flow rates (BOPD) as provided below. MARR is 30%. Wells 7500000 10000000 9800000 7500000 950000 Others 1500000 630000 910000 250000 Years 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Oil Production (BOPD) 0 3561 7871 7500 13200 15441 17220 13220 11193 9514 8087 6874 5843 4966 4221 3588 3050 2592 2204 1650 650 20 30% depreciated in 5 years by straight-line method. 100% depreciated in 5 years by straight-line method. Oil price: 38 $/bb1 Operation cost: $15/01 Royalty: 1/8 * Gross Income Corporation Tax: 50% of the Taxable Income Taxable income-Gross Income-Operational Cost-Depreciation Charges-Royalty Hint for depreciation allowances: As expected, the depreciation of each investment will be starting at its succeeding year, and stop after 5years. eg Depreciation of investment @ year 0: (7500000*0,30+1500000*1) /5 for the years 1-5 @year 1: (1000000*0,304630000*1) /5 for the years 2-6 Net cash flow=Gross income- Investment-Operational Cost-Royalty-Corporation Tax (a) Calculate payout time, rate of return (ROR), discounted profit to invetsment ratio (DPR), and net present value (NPV) of the project under current circumstances. Hint for DPR: Need to get the ratio of net profit to discounted amount of all investments to year 0! (One of the common mistakes in MT2). (6) Perform the sensitivity analyses to "oil price. "initial invetsments for wells done @ year zero "0", "MARR and operation cost by using the factors of 0.25, 0.5, 1,5, and 2.0. Use the after- tax PW/NPV yardstick in your evaluations, plot a single sensitivity graph for all variables and interpret your results accordingly. An oil field development project proposes the investment amounts and daily oil flow rates (BOPD) as provided below. MARR is 30%. Wells 7500000 10000000 9800000 7500000 950000 Others 1500000 630000 910000 250000 Years 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Oil Production (BOPD) 0 3561 7871 7500 13200 15441 17220 13220 11193 9514 8087 6874 5843 4966 4221 3588 3050 2592 2204 1650 650 20 30% depreciated in 5 years by straight-line method. 100% depreciated in 5 years by straight-line method. Oil price: 38 $/bb1 Operation cost: $15/01 Royalty: 1/8 * Gross Income Corporation Tax: 50% of the Taxable Income Taxable income-Gross Income-Operational Cost-Depreciation Charges-Royalty Hint for depreciation allowances: As expected, the depreciation of each investment will be starting at its succeeding year, and stop after 5years. eg Depreciation of investment @ year 0: (7500000*0,30+1500000*1) /5 for the years 1-5 @year 1: (1000000*0,304630000*1) /5 for the years 2-6 Net cash flow=Gross income- Investment-Operational Cost-Royalty-Corporation Tax (a) Calculate payout time, rate of return (ROR), discounted profit to invetsment ratio (DPR), and net present value (NPV) of the project under current circumstances. Hint for DPR: Need to get the ratio of net profit to discounted amount of all investments to year 0! (One of the common mistakes in MT2). (6) Perform the sensitivity analyses to "oil price. "initial invetsments for wells done @ year zero "0", "MARR and operation cost by using the factors of 0.25, 0.5, 1,5, and 2.0. Use the after- tax PW/NPV yardstick in your evaluations, plot a single sensitivity graph for all variables and interpret your results accordinglyStep by Step Solution
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