Unformatted text preview: Assuming oil is priced at $60 in the first year followed by 5% increases thereafter and maintaining the 12% discount rate, the present value is $23.8 million. You also requested that we investigate the present value of our remaining production at the end of year 3 if we sold our rights to years 4 through 7. The resulting present value at the end of year 3 would be $14.3 million which is $10.2 million in today’s present value....
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- Spring '10
- Mathematical finance, Barrel, $10.2 million