The price of oil is $115 per barrel.The effective lease rate and risk free rate are 3.0% and 4.0%,respectively.The constant cost of extraction is $85 per barrel and the volatility of prices is 15.0%.If an untapped well costs $2,100 to open and can produce indefinitely,at what price per barrel should the well be opened?

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The Answer of The price of oil is $115 per barrel.The effective lease rate and risk free rate are 3.0% and 4.0%,respectively.The constant cost of extraction is $85 per barrel and the volatility of prices is 15.0%.If an untapped well costs $2,100 to open and can produce indefinitely,at what price per barrel should the well be opened?

The Price of Oil Is $115 Per Barrel