Jake hessman controls 10 million barrels of oil beneath his properties. he decides how much to pump and when to pump it. for simplicity, assume hessman's choice is between pumping oil now or in 10 years hessman confidently forecasts that the price of oil will be $130 per barrel in 10 years. assume the annual interest rate is 10 percent. number what is the present value of the $130 price of oil 10 years from now? (round to the nearest dollar.) assume that the price of oil grows at a constant rate over the 10 years. for each of the following prices of oil now, indicate whether hessman pumps all his oil now, pumps allhis oil in 10 years, or spreads out his oil production over all ten years. (drag each price into a bin.) pump all oil now pump all oil in 10 years pump every year $60 $70 $100 $130 $40 $50
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Ответ:
The problem wants to find out the cash flow per period that Robert will make from his 40th birthday until his 65th birthday. We know that he wants to get $500,000 by his 65th birthday thus this is the future value of his money. To solve for the cash flow per period, the equation is Future value = Annuity * [((1+i)^n-1)/i]. The n is the number of payments Robert would make which is 25. The answer would be $3749.98.