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# Jet Black is an international conglomerate with a petroleum division and is currently competing in an auction to win the right to drill for crude oil...

Jet Black is an international conglomerate with a petroleum division and is currently competing in an auction to win the right to drill for crude oil on a large piece of land in one year. The current market price of crude oil is $124 per barrel, and the land is believed to contain 444,000 barrels of oil. If found, the oil would cost $78 million to extract. Treasury bills that mature in one year yield a continuously compounded interest rate of 4 percent, and the standard deviation of the returns on the price of crude oil is 55 percent.

Use the Black-Scholes model to determine the maximum amount that the company should be willing to pay for the lease. **(Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)**