Oct 08

Natural Resources Management - Assignment 1

 

Given the competitive exploration and extraction problem:

Year

Production

(106 br/yr)

Price

($/br)

Reserves

106 br

1997

552

54

7170

1998

557

51

9240

1999

554

52

9460

2000

551

68

9801

2001

548

75

9830

2002

544

79

9900

2003

522

85

8500

2004

493

90

6400

2005

458

94

6500

2006

417

95

4300

2007

368

100

4000

2008

312

101

3000

2009

251

102

2800

2010

185

107

1500

2011

113

109

1300

2012

22

110

800

Required:

Determine the optimal terminal time using the formula

aT – a(1 – e-dT)/d = R0

Where:

a is the intercept term for the downsloping demand curve

d = 0.05, which is the discount rate reflecting the time value of money

R0 is the reserve level at 1997

The solution should be submitted before the last lecture on 28/10/2013

 

Read 1929 times Last modified on Tuesday, 08 October 2013 09:48
Khalid Hamada

A Medical Doctor and Computer Engineer currently working at DAL Group as a Senior Business Analyst. His interests evolve around painting, calligraphy and science fiction novels.

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