THE JONES FAMILY, INCORPORATED Minicase Solution Principles of Corporate Finance, 12th Edition R. A. Brealey, S. C. Myers and F. Allen If the wildcat well is a success, it should produce 75×365 = 27,375 barrels per year. Suppose production starts after one year. The net cash flow per barrel, after pipeline and shipping costs and including one year’s inflation at 2.5%, is (100 – 20) ×1.025 = $82. Total cash flow is C1 = 27,375×82 = $2,245,000 (we will round to the nearest $1000). Production will decline by 5% per year, but prices are projected to grow at 2.5% per year. The net growth rate is (1.025×.95) – 1 = –.026 or –2.6%. Johnny used the CAPM to get a discount rate. The interest rate is 6%, the market risk premium is 7% and the beta is .8. Thus: 本文来源：https://www.wddqw.com/doc/788d1b2f24284b73f242336c1eb91a37f11132a7.html