A Company Is Considering Extracting Natural Gas from One of Its

question 4

Multiple Choice

A company is considering extracting natural gas from one of its properties. The initial extraction cost is $8 million, and all of the gas will be extracted in two years. The profits from selling the natural gas will be $6 million in year 1 and $5 million in year 2. What is the net present value of this investment at 12%?

• A) $2.5 million
• B) $1,343,112
• C) $800,780
• D) $1,020,645

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Definitions:

Allow Multiple Values

A setting in database applications that permits a single field to hold multiple values, usually in the form of a list or array.

Table Design

The process of defining the structure, relationships, and integrity constraints of tables within a database to efficiently store and manage data.

Zero-Length String

A string value that contains no characters, often used to indicate the absence of data in a text field.

Blank String

A string in programming that contains no characters, represented by "" or an empty text field.