Cost effective to pay for the project

Assignment Help Operation Management

Reference no: EM131129059

Tristian Oil estimates that a prospective field has 20 million barrels; If there is a 60% chance that there is 30million barrels and a 40% chance ?f XXXX million barrels. If the actual amount of oil is 30 barrels; Cash flows from drilling will be 16million. If the amount is only 10 Million; present value will be only $4million. It costs 6million to drill the well; that costs 100,000 is available and can verify the amount of our decision tree and NPV to determine if it is cost effective to pay for the project.

Reference no: EM131129059

Questions Cloud

Prepare journal entries for the transactions listed : Prepare journal entries for the transactions listed above. Prepare a Stockholders' section of a classified balance sheet as of December 31, 2014.

Such income tax returns randomly chosen : Suppose that the probabilities are 0.60, 0.20, 0.10, and 0.10 that a state income tax return will be filled out correctly, that it will contain only errors favoring the taxpayer, that it will contain only errors favoring the state, or that it will..

Where on the mrna does the microrna : Where on the mRNA does the microRNA/RISC complex bind (i.e., coding region, 5' untranslated region, 3' untranslated region) and how often does it typically bind to that mRNA location to inhibit translation?

Find the probabilities of getting : Among 25 silver dollars struck in 1903 there are 15 from the Philadelphia mint, 7 from the New Orleans mint, and 3 from the San Francisco mint. If 5 of these silver dollars are picked at random, find the probabilities of getting

Cost effective to pay for the project : Tristian Oil estimates that a prospective field has 20 million barrels; If there is a 60% chance that there is 30million barrels and a 40% chance ?f XXXX million barrels. present value will be only $4million. It costs 6million to drill the well; that..

Making models-diverse populations dimensions of diversity : Application: Case Study: Decision-Making Models and Diverse Populations Dimensions of diversity such as culture, race, religious orientation, sexual identity, rural/urban background, country of origin, and many others may sometimes cause ethical fric..

Dcf valuation models differ from direct capitalization model : 1. List three important ways in which DCF valuation models differ from direct capitalization models.2. Why might a commercial real estate investor borrow to help finance an investment even if she could afford to pay 100 percent cash?

What was the market value of amazon dot com : What was the market value of Amazon.com following its first day as a publicly held company? Amazon.com issued an initial public offering in May 1997.

Best chance of succeeding in generating additional revenue : Out of the ideas you list which one do you think would really have the best chance of succeeding in generating additional revenue and not just cannibalizing the existing products sales? Explain why your best choice seems stronger than the others?

User Account

All Pages