Use the information for the question(s)below. As an oil refiner,you are able to produce $76 worth of unleaded gasoline from one barrel of Alaska North Slope (ANS)crude oil.Because of its lower sulfur content,you can produce $77 worth of unleaded gasoline from one barrel of West Texas Intermediate (WTI)crude.
-Another oil refiner is offering to trade you 10,150 Bbls of Alaska North Slope (ANS)crude oil for 10,000 Bbls of West Texas Intermediate (WTI)crude oil.Assuming you just purchased 10,000 Bbls of WTI crude at the current market price,the added benefit (cost)to you if you take the trade is closest to:
A)$730,600.
B)$771,400.
C)$40,800.
D)$43,308.

Question

Use the information for the question(s)below.  As an oil refiner,you are able to produce $76 worth of unleaded gasoline from one barrel of Alaska North Slope (ANS)crude oil.Because of its lower sulfur content,you can produce $77 worth of unleaded gasoline from one barrel of West Texas Intermediate (WTI)crude.
-Another oil refiner is offering to trade you 10,150 Bbls of Alaska North Slope (ANS)crude oil for 10,000 Bbls of West Texas Intermediate (WTI)crude oil.Assuming you just purchased 10,000 Bbls of WTI crude at the current market price,the added benefit (cost)to you if you take the trade is closest to:
A)$730,600. 
B)$771,400. 
C)$40,800. 
D)$43,308.

Quizplus · Accepted Answer

The added benefit (cost) is calculated by finding the difference in value between the two types of crude oil. The difference in barrels is 150 Bbls, and the price difference per barrel is $272 (ANS) - $270 (WTI) = $2. Therefore, the added benefit is 150 Bbls * $2 = $300. However, the question asks for the closest value, and $40,800 is the closest option to the calculated benefit.

Use the Information for the Question(s)below