Pete 353 Exam 1 Questions & Answers 2024/2025
Economics - ANSWERSDrives the decision making in oil and gas companies
Net Cash Flow In - ANSWERSProduction x Price=Revenue
Net Cash Flow Out - ANSWERS% Goes to the Royalty Owner
Operating Expenses
Production Taxes
Capital Expenditures
Fe...
Economics - ANSWERSDrives the decision making in oil and gas companies
Net Cash Flow In - ANSWERSProduction x Price=Revenue
Net Cash Flow Out - ANSWERS% Goes to the Royalty Owner
Operating Expenses
Production Taxes
Capital Expenditures
Federal Taxes
I - ANSWERSInterest
P - ANSWERSPrincipal
n - ANSWERSyears
t - ANSWERSloan period or investment period, years
m - ANSWERSnumber of compounding or interest periods per year
m=1 for yearly
m=4 for quarterly
m=12 for monthly
in - ANSWERSnominal interest rate, fraction per year
,ie - ANSWERSeffective interest rate, fraction per year
r - ANSWERSinterest rate
Principal - ANSWERSamount of borrowed or loaned money
Interest - ANSWERSrent paid for the use of money loaned
Rate of Return - ANSWERSis the incremental gain on the investment to the loaner
What does the simple 'n' refer to? - ANSWERSIt is years
What is the m? - ANSWERSit is the number of times the interest is applied or compounded
Simple Interest - ANSWERSonly initial principal, over a fixed loan period, at a set rate
I=principalXperiodsXrate
Payback Sum at End of Year - ANSWERSSum= Initial Principal + Interest
Simple Interest, Payback before End of Period - ANSWERSI=Pni
Payback=Initial principal X (1+PeriodXrate)
Simple Interest - ANSWERSIs calculated using principal only, earning interest over a fixed loan period. At
the end of the period, both the principal and the accrued interest are returned.
Compound Interest - ANSWERSIs the interest accrued on BOTH the principal and the unpaid interest
earned in the previous periods. Interest accrues on both principal and unpaid interest from previous
periods.
Nominal Rate (in) - ANSWERSis expressed per year and then applied to a compound period as fraction of
the year
-Compounded periodically or continuously
Effective rate (in) - ANSWERSexpresses equivalent rate for the year resulting from compounding at
nominal rate for each period during the year
ie=
Periodic - ANSWERS(1+(in/m)^m)-1
for periodic compounding
ie=
Continuous - ANSWERS(e^r)-1
Consumer Price Index (CPI) - ANSWERSIs often used to adjust data for inflation
(x/Salary in 2011)=(CPI 2015/CPI 2011)
Future Value of Present Sum - ANSWERSF=P(1+ie)^n
(1+ie)^n - ANSWERSF/P
Annuity - ANSWERSa series of equal periodic payments (disbursements) over time
Ordinary Annuity - ANSWERSPv determined one period before first payment
Annuity Due - ANSWERSPv determined as of date of first payment
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Bensuda. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $9.99. You're not tied to anything after your purchase.