What is the present value of the anticipated petroleum

Reference no: EM13208825

A petroleum geologist estimates that the present annual production of 300000 barrels of oil from a group of 10 wells will decrease as follows over a 19 year life:
Years 1 - 4, 300000 barrels/year,, Years 5-10, 215000 barrels/year, 11-15, 125000 and 16-19 50000 barrels/year. The annual value of the petroleum product has been estimated as follows: Years 1-5, $8 er barrel, 6-12 $10 per barrel, 13-19 $12.00 per barrel. If the cost of capital is 12% what is the present value of the anticipated petroleum revensues.

Reference no: EM13208825

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