Use the Information for the Question(s)below

question 86

Multiple Choice

Use the information for the question(s) below.
Wildcat Drilling is an oil and gas exploration company that is currently operating two active oil fields with a market value of $200 million each.Unfortunately,Wildcat Drilling has $500 million in debt coming due at the end of the year.A large oil company has offered Wildcat drilling a highly speculative,but potentially very valuable,oil and gas lease in exchange for one of their active oil fields.If Wildcat accepts the trade,there is a 10% chance that Wildcat will discover a major new oil field that would be worth $1.2 billion,a 15% that Wildcat will discover a productive oil field that would be worth $600 million,and a 75% chance that Wildcat will not discover oil at all.
-What is the overall expected payoff to Wildcat from the speculative oil lease deal?

• A)$360 million
• B)$275 million
• C)$85 million
• D)$160 million

---

Definitions:

Recognition

Acknowledgment or appreciation of an individual's achievements or contributions, often used as a motivational tool in organizational settings.

Human Need

Fundamental requirements that are considered essential for psychological and physical well-being of humans.

High Self-efficacy

The belief in one's own ability to successfully accomplish tasks and challenges.

Particular Task

A specific or distinct activity or assignment that needs to be accomplished within a set of defined parameters or objectives.