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Memphic Memphic
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6 years ago
Wyatt oil is considering drilling a new self sustaining oil well at a cost of $1,000,000. This well will produce $100,000 worth of oil during the first year, but as oil is removed from the well the amount of oil produced will decline by 2%, per year forever. If the Wyatt oil's appropriate interest rate is 8%, then the NPV of this oil well is closest to:
A) -$250,000
B) $0
C) $250,000
D) $1,000,000
Textbook 
Corporate Finance: The Core

Corporate Finance: The Core


Edition: 4th
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pbrown223pbrown223
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6 years ago
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2 years ago Edited: 2 years ago, nikkinguyen
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