A Consultancy Calculates That It Can Supply Crude Oil Assaying

question 119

Multiple Choice

A consultancy calculates that it can supply crude oil assaying services to a small oil producer for $120,000 per year for five years.There are some upfront costs the consultancy will require the oil producer to absorb.What is the maximum that these upfront costs could be,if the equivalent annual annuity to the oil company is to be under $150,000,given that the cost of capital is 10%?

• A)$30,000
• B)$113,724
• C)$128,698
• D)$150,000
• E)$94,784

---

Definitions:

Religious Beliefs

Personal or institutionalized system of attitudes, morals, ethics, worldviews, and practices centered on the idea of a supernatural power or powers.

Income Ratio

A measure of a company’s profitability, typically calculated by dividing a particular form of income by another metric, such as net income divided by sales.

Payment Split

The division of a total payment amount into smaller, individual payment parts, often used to manage cash flow or allocate funds to different purposes.

Written Agreement

A formal contract documented in writing between two or more parties outlining the terms and conditions of an agreement.