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Q1/ An exploration project requires drilling a discovery well in the first (1) year and two (2) development wells in the second (2nd) year. The

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Q1/ An exploration project requires drilling a discovery well in the first (1) year and two (2) development wells in the second (2nd) year. The revenues, expenses, and investment costs in UD dollars are summarized below: Year 1 2 3 4 Revenue, USA Dollars (S) 800,000 2,000,000 1,500,000 500000 Expense, USA Dollars (S) 400,000 1,300,000 800,000 510,000 Investment, USA Dollars (S) 500,000 1200,000 0 0 Based upon the above data and Use an interest rate of 12% to Calculate the following: a. Net Cash Flow b. Rate of Return (ROR) 19 c. Pay out time 3.800 13 ore Innne (25 Marks)

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