Suppose the oil price is uncertain and can be $60/bbl or $30/bbl next year with equal probability, then the value of the option to postpone the project by one year is:
A) +34 million
B) +25 million
C) +59 million
D) None of the above

Question

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The Answer of Suppose the oil price is uncertain and can be $60/bbl or $30/bbl next year with equal probability, then the value of the option to postpone the project by one year is:
A) +34 million
B) +25 million
C) +59 million
D) None of the above

Suppose the Oil Price Is Uncertain and Can Be $60/bbl