It was discovered by geologists that an oil deposit can produce oil commercially for 5 years. In order to develop this deposit $100 million is required in initial investment with the sale value of the equipment of $20 million at the end of the deposit's life. In addition, $4 million annually is required for operating and maintenance costs. Current price of oil is $90 per barrel. How much oil must this deposit produce per year in order to cover all the costs under 2% interest rate?

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The Answer of It was discovered by geologists that an oil deposit can produce oil commercially for 5 years. In order to develop this deposit $100 million is required in initial investment with the sale value of the equipment of $20 million at the end of the deposit's life. In addition, $4 million annually is required for operating and maintenance costs. Current price of oil is $90 per barrel. How much oil must this deposit produce per year in order to cover all the costs under 2% interest rate?

It Was Discovered by Geologists That an Oil Deposit Can