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8 bytes added ,  16:19, 20 August 2014
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:::<sup>IDC's (100 % expensed for tax calculation) = $950,000</sup><br>
 
:::<sup>IDC's (100 % expensed for tax calculation) = $950,000</sup><br>
 
:::<sup>Tangible expenditures (depreciable basis for tax calculation) = $300,000</sup><br>
 
:::<sup>Tangible expenditures (depreciable basis for tax calculation) = $300,000</sup><br>
::<sup>Estimated dry hole cost if the well is unsuccessful is $750,000 (After-tax = $750,000 x (1 - 0.34) = $495,000)
+
::<sup>Estimated [[dry hole]] cost if the well is unsuccessful is $750,000 (After-tax = $750,000 x (1 - 0.34) = $495,000)
    
A completed cash flow time diagram is shown in Table 2 along with the equivalent net present value calculation.
 
A completed cash flow time diagram is shown in Table 2 along with the equivalent net present value calculation.
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:<sup>Incremental tax rate is 34%</sup><br>
 
:<sup>Incremental tax rate is 34%</sup><br>
 
:<sup>Oil price is $18.00/bbl. Gas price is $1.50/MCF</sup><br>
 
:<sup>Oil price is $18.00/bbl. Gas price is $1.50/MCF</sup><br>
:<sup>Cost of Failure is assumed to be the after tax cost of 2 dry holes.</sup><br>
+
:<sup>Cost of Failure is assumed to be the after tax cost of 2 [[dry hole]]s.</sup><br>
 
::<sup>(750,000 x (1 - 0.34) x 2 = $990,000)</sup><br>
 
::<sup>(750,000 x (1 - 0.34) x 2 = $990,000)</sup><br>
 
:<sup>Assumed investment schedule:</sup><br>
 
:<sup>Assumed investment schedule:</sup><br>
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