-Consider the Oil-Drilling Game Depicted in Figure 5

Multiple Choice

-Consider the oil-drilling game depicted in Figure 5.4 in which payoffs are in millions of dollars. Suppose that this game is played repeatedly and the probability that the game will end in the next round is 10 percent and the discount rate is 25 percent. What is the present value of the stream of payoffs by cooperating?

A) An amount between $85.7 and $85.8 million.
B) An amount between $113.7 and $113.8 million.
C) An amount between $185.7 and $185.8 million.
D) An amount between $210.8 and $210.9 million.
E) None of the above.