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Please Solve using EXCEL and provide the used formulas :) Thank you An electrical submersible pump (ESP) is decided to be used for an increased
Please Solve using EXCEL and provide the used formulas :)
Thank you
An electrical submersible pump (ESP) is decided to be used for an increased and accelerated production in a heavy oil well. The extra investment required for the ESP pump at year zero (0) is $400,000. The incremental oil production per day (BOPD) using ESP is provided below. Year Incremental Daily Production Rate (BOPD) 1 95 2 60 3 45 4 35 5 25 Operating Cost: 10 $/bbl Oil Price: 35 $/bb1 Income Tax: 50% of taxable income Royalty: 1/8 of produced oil Depreciation: The total cost of the ESP pump will be depreciated with straight line in 5 years. (a) Calculate the present worth of after tax cash flow with 35% discount rate. (b) Calculate the rate of retum (ROR) obtained by investing $400,000 on ESPStep by Step Solution
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