An oil company is considering an investment in a new oil field.There are several uncertain variables that affect the profitabilityof the project.
- Investment cost incurs in year 0 and the installation takes 2years to construct (this is assumed not uncertain). Productionstarts in the beginning of the year the installation is completed.In addition, the following is known about the investment cost:
- Oil production can start once the installation is completed.The cost of the project is most likely at 80 million $. The companyknows that the cost will not be below 40 million $ and could be ashigh as 200 million $.
- Additional investments
OR
PayPal Gateway not configured
ORPayPal Gateway not configured