Score: 0 of 10 pts 14 of 18(11 completa HW Score 51.81%, 93.26 of 180 pts P11-23 (similar to) Question Hello Payback period and NPV calculation) Pato Energy is an ol and gas exploration and development company located in Farmington, New Mexico The company halow weils in hopes of finding rantail and gas deposte The form is considering two different ring contestat have very different production potential. The first is in the famed Shale region of control Texas and the others in the Our Coast The Barnet Shale project requires a much larger investment provides cash flows cover a much longer period of time thane Our Coast opportunity in addition, the longer be of the Barrett Shale project screws in moral expenditures a year of the project to where production roughout the project to your expected to the expenditure involves purring the water or co, down into the wole in order to more the tow off and gas from the We The expected ca fows for the proche as flows: b. Based on the payback perios, which of the projects appears to be the best terrative? What are the tations of the payback period ranking? That is what does the pack period not consider that is important in linge value creation potential of iese two pros? e. Pas management as a discount rate of 192 percent to the rest values of its rergy investment, what is the NPV of the opposed ani? d. What is your extmate of the value al we be created for by the cance of each of these two ne? exploration and development company located in Farmington, New Mexico. The company drills st oduction potentials. The first is in the Barnett Shale region of central Texas and the other is in the od of time than the Gulf Coast opportunity. In addition, the longer life of the Barnett Shale project = involves pumping either water or CO2 down into the wells in order to increase the flow of oil and Data Table es U Year Gulf Coast $(1,100,000) 850,000 850,000 425,000 110,000 0 1 2 3 4 5 6 7 8 9 10 Barnett Shale $(4,500,000 1,800,000 1,800,000 (900,000) 1,800,000 1,600,000 1,600,000 1,600,000 750,000 400,000 90,000 Print Done