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Consider an offshore oil property with an estimated oil reserve of 50 million barrels of oil; the cost of developing the reserve is expected to be $...

Consider an offshore oil property with an estimated oil reserve of 50 million barrels of oil; the cost of developing the reserve is expected to be $ 600 million, and the development lag is two years. The firm has the rights to exploit this reserve for the next 20 years, and the marginal value per barrel of oil is $12 (price per barrel - marginal cost per barrel). Once developed, the net production revenue each year will be 5% of the value of the reserves.

  1. Download time series data for oil prices (monthly data for last 5 year)
  2. Characterize the distribution of prices
  3. Do a Monte-Carlo simulation for oil price for the next 20 years
  4. What is the value of this offshore property?
  5. Calculate the value of the offshore property if you can close your operations by the end of the 10th year
  6. Calculate the value of the offshore property, if you can close your operations by the end of any year. 

CAN SOMEONE ANSWER THIS QUESTION USING R CODE!!!!!!!

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