The Karns Oil Company is deciding whether to drill for oil on a tract of land that the company owns. The company estimates the project would cost $8 million today. Karns estimates that, once drilled, the oil will generate positive net cash flows of $4 million a year at the end of each of the next 4 years. Although the company is fairly confident about its cash flow forecast, in 2 years it will have more information about the local geology and about the price of oil. Karns estimates that if it waits 2 years then the project would cost $9 million. Moreover, if it waits 2 years, then there is a 90% chance that the net cash flows would be $4.2 million a year for 4 years and a 10% chance that they would be $2.2 million a year for 4 years. Assume all cash flows are discounted at 10%. Required:
Use the Black-Scholes model to estimate the value of the option. Assume the variance of the project's rate of return is 0.111 and that the risk-free rate is 8%.

1. list five staple convenience goods that you or your household buys on a regular basis. (you do not need to use complete sentences. 2.5 points) 2. list three impulse convenience goods that you or someone you know has purchased. (you do not need to use complete sentences. 2.5 points) 3. describe a shopping good that you or someone you know purchased. what kind of research did you or that person do before buying the product? (1-5 sentences. 3.0 points) 4. choose an example of a company you could start, and decide which business structure would make the most sense for that type of company (sole proprietorship, partnership, llc, c corporation, s corporation, or nonprofit corporation). explain why this structure would be good for this type of company. give at least 3 reasons. (3-6 sentences. 6.0 points) 5. if you were starting a new business, describe at least three departments to the company that you would need right away. why are these departments so important? (1-5 sentences. 3.0 points) 6. describe a product that you think has saturated its market. what makes you think it has saturated its market? (1-5 sentences. 3.0 points)

Zeta corporation is a manufacturer of sports caps, which require soft fabric. the standards for each cap allow 2.00 yards of soft fabric, at a cost of $2.00 per yard. during the month of january, the company purchased 25,000 yards of soft fabric at $2.10 per yard, to produce 12,000 caps. what is zeta corporation's materials price variance for the month of january?

Rahm's credit card issuer calculates interest based on the outstanding balance at the end of the last billing period. what is this method of calculating interest on a credit card called?