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Suppose that we are drilling an oil well. The drilling rig costs $1500 today, and in one year the well is either a success or

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Suppose that we are drilling an oil well. The drilling rig costs $1500 today, and in one year the well is either a success or a failure. The outcomes are equally likely. The discount rate is 10%. The PV of the successful payoff at time one is $5400. The PV of the unsuccessful payoff at time one is $0. Now, we know that the rig can be sold for $2300 in a year. When we include the value of the option to abandon, the NPV of this drilling project should be (keep two decimal places)

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