Alaska North Slope Crude Oil (ANS)$71.75/BblWest Texas Intermediate Crude Oil(WTI)$73.06/BblAs an oil refiner, you are able to produce $76 worth of unleaded gasoline from onebarrel of Alaska North Slope (ANS) crude oil. Because of its lower sulfur content, youcan produce $77 worth of unleaded gasoline from one barrel of West TexasIntermediate (WTI) crude.Another oil refiner is offering to trade you 10,150 Bbls of ANS crude oil for 0,000Bbis of WTI crude oil. Assuming you currently have 10.000 Bbis of WTI crude, whatshould you do?O Trade the 10.00 Bbls WTI crude with the other refinder and refine the 10,150Bbls of ANS crude.Do nothing, refine the 10,000 Bbls of WTI crude.Sell 10.000 Bbls WTI crude on the market and use the proceeds to purchase andrefine ANS crudeTrade the 10,000 Bbls WTI crude with the other refiner and then sell the 10,150Bbls of ANS crude.

Given; Cost of Alaska North Slope crude oil= $71.75 per Bbl Cost of West Texas Intermediate Crude…

Alaska North Slope Crude Oil (ANS) $71.75/Bbl West Texas Intermediate Crude Oil (WTI) $73.06/Bbl 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 ANS crude oil for 0,000 Bbls of WTI crude oil. Assuming you currently have 10.000 Bbis of WTI crude, what should you do? Trade the 10,00 Bbls WTI crude with the other refinder and refine the 10,150 Bbls of ANS crude. Do nothing, refine the 10,000 Bbls of WTI erude. O Sell 10.000 Bbls WTI crude on the market and use the proceeds to purchase and refine ANS crude Trade the 10,000 Bbis WTI crude with the other refiner and then sell the 10,15o Bbls of ANS crude.

Alaska North Slope Crude Oil (ANS) $71.75/Bbl West Texas Intermediate Crude Oil (WTI) $73.06/Bbl 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 ANS crude oil for 0,000 Bbls of WTI crude oil. Assuming you currently have 10.000 Bbis of WTI crude, what should you do? Trade the 10,00 Bbls WTI crude with the other refinder and refine the 10,150 Bbls of ANS crude. Do nothing, refine the 10,000 Bbls of WTI erude. O Sell 10.000 Bbls WTI crude on the market and use the proceeds to purchase and refine ANS crude Trade the 10,000 Bbis WTI crude with the other refiner and then sell the 10,15o Bbls of ANS crude.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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