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Q14) Josh currently owns a piece of land with oil underneath. He estimates a 50%...

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Q14) Josh currently owns a piece of land with oil underneath. He estimates a 50% chance it is "top-tier land" (meaning it has $8,000,000 worth of oil) and a 50% chance it is "not so hot" (meaning it has $2,000,000 worth of oil). It costs $3,000,000 to drill a well and access the oil. Josh can invest in a seismic test which costs $100,000 and will verify the amount of oil under the ground. What is NPV increase when implementing the seismic test? A) $400,000 B) $300,000 C) $200,000 D) $100,000

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