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Suppose That the Oil Price Is Uncertain and Can Be

Question 47

Multiple Choice

Suppose that the oil price is uncertain and can be either $60/bbl.or $30/bbl.next year with equal probability.Calculate the expected NPV of the project if it is postponed by one year.


A) +50 million
B) -25 million
C) +59 million
D) +47 million

Correct Answer:

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