Question 4 (20 points): Assume an investment of $150,000 at the present time. There are two possibilities for this project: Success: The annual revenue of $60,000 for 12 years (from year 1 to 12) with no salvage value. Failure: Zero annual revenue and the salvage value of 75,000 at the end of year 1. What is minimum success probability that project can be economically satisfactory? In other words, what is the breakeven probability. Assume a minimum interest rate of return (i*) of 15%. Question 5 (20 points): Calculate the ENPV for buying and drilling an oil lease assuming a minimum ROR (*) of 8.0% and the following estimated costs and success/failure rates: The lease costs -$250,000 dollars at time zero and drilling will start at year 1 with a cost of $100,000 dollars. There is a 100% probability of drilling a well if we decide to purchase the lease. Failure Case: There is a 70% that well is a dry hole without any production and will require an additional abandonment cost of -$75,000 in year 1. Success Cases: If drilling is successful (30%), then there are two possibilities: 1. Optimistic: A 40% probability that the well yields an annual income of $300,000 dollars for 14 years (from year 2 to year 15) with an abandonment cost of $50,000 and environmental remediation cost of $100,000 in year 15 2. Pessimistic: A 60% probability that the well yields annual income of $200,000 dollars for 11 years (from year 2 to year 12) with an abandonment cost of $50,000 and environmental remediation cost of - $75,000 in year 12. Is this investment economically satisfactory? Explain your work in detail including all the required factors and calculations