Project Options - Your midrange guess as to the amount of oil in a prospective field is 10M Barrels, but in fact there is a 50% chance that the amount of oil is 15M Barrels and a 50% chance of 5M Barrels. If the actual amount of oil is 15M Barrels, the present value of the cash flows from drilling will be $8M. If the amount is only 5M barrels, the present value will only be $2M. It costs $3M to drill the well. Suppose that a seismic test costing $100k can verify the amount of oil under the ground. Is it worth pay for the test? Use a decision tree to justify the answer.