Q2 Suppose an opportunity arise to drill an oil well for $1,500,000 The well is expected to generate the expenses and incur costs as shown in below table over a 16 year period Calculate the following 1 POP 2 The before tax NPV discounted at 10 for our investment opportunity in the proposed well 3 The future value of project at 15 discount rate for (10) ten years Year 1 2 3 4 S 6 7 8 9 10 11 12 13 14 15 16 Direct OPEX (5 x 1000) Capital Cost ($ x 1000) 1107 180 886 146 709 119 567 98 454 81 363 67 290 56 232 47 186 40 149 35 124 30 103 27 85 23 71 21 59 19 0 0 (40 Marks) Q2 Suppose an opportunity arise to drill an oil well for $1,500,000 The well is expected to generate the expenses and incur costs as shown in below table over a 16 year period Calculate the following 1 POP 2 The before tax NPV discounted at 10 for our investment opportunity in the proposed well 3 The future value of project at 15 discount rate for (10) ten years Year 1 2 3 4 S 6 7 8 9 10 11 12 13 14 15 16 Direct OPEX (5 x 1000) Capital Cost ($ x 1000) 1107 180 886 146 709 119 567 98 454 81 363 67 290 56 232 47 186 40 149 35 124 30 103 27 85 23 71 21 59 19 0 0 (40 Marks)

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Q2  Suppose an opportunity arise to drill an oil well for $1,500,000  The well is expected to generate the expenses and incur costs as shown in below table over a 16 year period  Calculate the following  1  POP 2  The before tax NPV discounted at 10  for our investment opportunity in the proposed well 3  The future value of project at 15  discount rate for (10) ten years  Year 1 2 3 4 S 6 7 8 9 10 11 12 13 14 15 16 Direct OPEX (5 x 1000) Capital Cost ($ x 1000) 1107 180 886 146 709 119 567 98 454 81 363 67 290 56 232 47 186 40 149 35 124 30 103 27 85 23 71 21 59 19 0 0 (40 Marks) Q2  Suppose an opportunity arise to drill an oil well for $1,500,000  The well is expected to generate the expenses and incur costs as shown in below table over a 16 year period  Calculate the following  1  POP 2  The before tax NPV discounted at 10  for our investment opportunity in the proposed well 3  The future value of project at 15  discount rate for (10) ten years  Year 1 2 3 4 S 6 7 8 9 10 11 12 13 14 15 16 Direct OPEX (5 x 1000) Capital Cost ($ x 1000) 1107 180 886 146 709 119 567 98 454 81 363 67 290 56 232 47 186 40 149 35 124 30 103 27 85 23 71 21 59 19 0 0 (40 Marks)

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Q2: Suppose an opportunity arise to drill an oil well for $1,500,000. The well is expected to generate the expenses and incur costs as shown

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