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As an oil refiner, you are able to produce $77 worth of unleaded gasoline from one barrel of Alaska North Slope (ANS) crude oil. Because of its lower sulfur content, you can produce $78 worth of unleaded gasoline from one barrel of West Texas Intermediate (WTI) crude.
Assuming you currently have 10,000 bbl of WTI crude, the total benefits to you if you were to sell the 10,000 bbl of WTI crude and use the proceeds to purchase and refine ANS crude is closest to ________.
A) $794,274
B) $780,000
C) $781,550
D) $784,091

Question

Use the information for the question(s) below.

As an oil refiner, you are able to produce $77 worth of unleaded gasoline from one barrel of Alaska North Slope (ANS) crude oil. Because of its lower sulfur content, you can produce $78 worth of unleaded gasoline from one barrel of West Texas Intermediate (WTI) crude.
Assuming you currently have 10,000 bbl of WTI crude, the total benefits to you if you were to sell the 10,000 bbl of WTI crude and use the proceeds to purchase and refine ANS crude is closest to ________.
A) $794,274 
B) $780,000 
C) $781,550 
D) $784,091

Quizplus · Accepted Answer

D) Total Benefits
Sell WTI and use proceeds to buy ANS 11eaabab_c0c0_0ba5_b90e_332692fdb21a_TB5536_11 Buy ANS crude 11eaabab_c0c0_0ba6_b90e_832559b16cc0_TB5536_11 or approx 11eaabab_c0c0_0ba7_b90e_a360353c5849_TB5536_11 11eaabab_c0c0_0ba8_b90e_cb8b8bdad252_TB5536_00

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