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question 1 An oil well now produces 100 000 barrels per year. The well will produce for 18 years more, but production will decline by
question 1
An oil well now produces 100 000 barrels per year. The well will produce for 18 years more, but production will decline by 4% per year. Oil prices, however, will increase by 2% per year. The discount rate is 8%. What is the present value of the wells production if todays price is 52 USD per barrel?
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