ISE 307 Engineering Economic Analysis Quiz 2ARAMCO is considering the development of one of two oil fields that are expected to supply oil for two years. Field A has a development cost of 100 million riyals and it will generate annual revenue of 55 million. Field B has a development cost of 200 million riyals and will generate annual revenue of 120 million riyals. Take costs and revenues in real terms and ARAMCO’s minimum acceptable rate or return is 5%. ARAMCO can operate on only one field during the coming two years. Which oil field is justifiable under the internal rate of return criterion? Industrial and Systems Engineering |