One method for developing a mine containing an estimated 100,000 tons of ore will result in the recovery of 62% of the available ore deposit and will cost $23 per ton of material removed. A second method of development will recover only 50% of the ore deposit, but it will cost only $15 per ton of material removed. Subsequent processing of the removed ore recovers 300 pounds of metal from each ton of processed ore and costs $40 per ton of ore processed. The recovered metal can be sold for $0.80 per pound.Which method for developing the mine should be used if your objective is to maximize total profit from the mine?
One method for developing a mine containing an estimated 100,000 tons of ore will result in the recovery of 62% of the available ore deposit and will cost $23 per ton of material removed. A second method of development will recover only 50% of the ore deposit, but it will cost only $15 per ton of material removed. Subsequent processing of the removed ore recovers 300 pounds of metal from each ton of processed ore and costs $40 per ton of ore processed. The recovered metal can be sold for $0.80 per pound.Which method for developing the mine should be used if your objective is to maximize total profit from the mine?
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter8: Cost Analysis
Section: Chapter Questions
Problem 1.3CE
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One method for developing a mine containing an estimated 100,000 tons of ore will result in the recovery of 62% of the available ore deposit and will cost $23 per ton of material removed. A second method of development will recover only 50% of the ore deposit, but it will cost only $15 per ton of material removed. Subsequent processing of the removed ore recovers 300 pounds of metal from each ton of processed ore and costs $40 per ton of ore processed. The recovered metal can be sold for $0.80 per pound.Which method for developing the mine should be used if your objective is to maximize total profit from the mine?
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