Recycle America Inc.has the opportunity to trade 8000 pounds of plastic pellets made from recycled soda bottles for 5000 pounds of aluminum cans.If the current market price of scrap aluminum is $0.83 per pound and the current market price for plastic pellets is $0.57 per pound,then the added benefit (cost)of making this trade is:

Question

Quizplus · Accepted Answer

The value of 8000 pounds of plastic pellets is 8000 * $0.57 = $4560. The value of 5000 pounds of aluminum cans is 5000 * $0.83 = $4150. The added cost of making the trade is $4150 - $4560 = -$410, which is a cost of $410.