In a trade with the government of an oil producing nation,a manufacturer will deliver 14 Caterpillar D9 tractors,with a value of $350,000 per tractor,and receive 45,000 barrels of oil,valued at $115 per barrel.What is the net benefit of this trade to the manufacturer?
A)$158,000
B)$275,000
C)$1,750,000
D)$4,900,000

Question

Quizplus · Accepted Answer

First, we calculate the total value of the 14 Caterpillar D9 tractors:
14 tractors x $350,000 per tractor = $4,900,000
Next, we calculate the total value of the 45,000 barrels of oil:
45,000 barrels x $115 per barrel = $5,175,000
To determine the net benefit, we subtract the cost of the tractors from the value of the oil:
$5,175,000 - $4,900,000 = $275,000
Therefore, the net benefit of this trade to the manufacturer is $275,000.

In a Trade with the Government of an Oil Producing