Amount of the prospective future receipts from the wells

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Reference no: EM13703914

A petroleum engineer estimates that the present production of 400,000 barrels of oil during this year from a group of 10 wells will decrease at the rate of 15% per year for years 2 through 10. Oil is estimated to be worth $25 per barrel. If the interest rate is 10% compounded annually, what is the equivalent present amount of the prospective future receipts from the wells?

Reference no: EM13703914

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