You drill and complete a Baaken well with the following production. Oil price is $60/stb and expected to remain flat for the first five years. If the well costs $ó million dollars to drill and complete, how long will it take to reach payout? The interest rate is 4%. Year BO 1 51,100 41,975 3 29,200 4 18250 5 9125 What is the profit you calculated in problem 3 (Baaken well problem)? What is the profit to investment ratio (PIR) for problem 3 (Baaken well problem)?

You drill and complete a Baaken well with the following production. Oil price is $60/stb and expected to remain flat for the first five years. If the well costs $ó million dollars to drill and complete, how long will it take to reach payout? The interest rate is 4%. Year BO 1 51,100 41,975 3 29,200 4 18250 5 9125 What is the profit you calculated in problem 3 (Baaken well problem)? What is the profit to investment ratio (PIR) for problem 3 (Baaken well problem)?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 10PB: Bouvier Restaurant is considering an investment in a grill that costs $140,000, and will produce...

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