1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Olin [163]
3 years ago
9

Ocean water contains 0.9 ounces of gold per ton. Method A costs $550 per ton of water processed and will recover 90% of the meta

l. Method B costs $400 per ton of water processed and will recover 60% of the metal. The two methods require the same capital investment and are capable of producing the same amount of gold each day. If the extracted gold can be sold for $1,750 per ounce, which method should be recommended? The supply of ocean water is essentially unlimited. Hint: Work this problem on the basis of profit per ounce of gold extracted.
Business
1 answer:
qwelly [4]3 years ago
5 0

Answer:

Method A should be recommended, because it produces a profit of $61.73 more than Method B

Explanation:

To determine, the recommended, method, let us calculate the amount needed to extract 1 ounce of gold using each method, then subtract these from the selling price to get the profit when each method is used.

Method A:

Recovery rate of metal = 90% = 90/100 = 0.9

Hence for 1 ton of water processed, amount of gold that can be recovered

= 0.9 × 0.9 = 0.81 ounces of gold.

Therefore, to produce 1 ounce of gold, we will solve as follows:

0.81 ounce of gold = 1 ton of water

∴ 1 ounce of gold = 1/0.81 = 1.2345679 ounces of water

Next, we are told that 1 ton of water costs $550 to process

∴ 1.2345679 tons of water = 550 × 1.2345679 = $679.01

Therefore, for method A, the effective amount in dollars used to extract 1 ounce of gold = $679.01

Calculating net income from this method is as follows

profit per ounce = selling price per ounce -  cost price per ounce

profit per ounce = 1,750 - 679.01 = $1,070.99

Method B:

recovery rate of metal = 60% = 60/100 = 0.6

Hence for 1 ton of water processed, amount of gold that can be recovered

= 0.6 × 0.9 = 0.54 ounces of gold.

Therefore, to produce 1 ounce of gold, we will solve as follows:

0.54 ounce of gold = 1 ton of water

∴ 1 ounce of gold = 1/0.54 = 1.8518519 ounces of water

Next, we are told that 1 ton of water costs $400 to process

∴ 1.8518519 tons of water = 400 × 1.2345679 = $740.7

Therefore, for method B, the effective amount in dollars used to extract 1 ounce of gold = $740.74

Calculating net income from this method is as follows

profit per ounce = selling price per ounce -  cost price per ounce

profit per ounce = 1,750 - 740.74 = $1,009.26

Since the net income from method A ($1070.99) is more than the net income from method B ($1,009.25), method A is recommended

You might be interested in
The money multiplier equalsa.1/(1 R), where R represents the quantity of reserves in the economy. b.1/(1 R), where R represents
sergeinik [125]

Answer:

b. 1/R, where R represents the reserve ratio for all banks in the economy

Explanation:

The reserve ratio can be define as the part of reservable liabilities that commercial banks must hold onto or have, rather than investing or borrowing out. This can be said to be a necessary requirement determined by every central bank of a particular country, which in the United States is the Federal Reserve. It is also known as the cash reserve ratio.

Commercial banks in the U.S are required to hold reserves against their total reservable liabilities (deposits) which cannot be borrowed out by the bank. Example of reservable liabilities include non personal time deposits, net transaction accounts and Eurocurrency liabilities.

6 0
2 years ago
If local shell gasoline stations look at bp stations' prices as the primary method of determining its own prices, shell is using
djyliett [7]
<span>If local shell gasoline stations look at bp stations' prices as the primary method of determining its own prices, shell is using</span> competition-based pricing.
In this we considers costs have not much value and consider to be less important than competitor's prices, means competitor's price is important.
4 0
3 years ago
Which kind of decisions involving resources must producers of goods and services make? ECONOMICS.
yawa3891 [41]
A.Allocating is the answer
5 0
3 years ago
Read 2 more answers
Two hundred paper mills compete in the paper market. The total cost of production (in dollars) for each mill is given by the for
zheka24 [161]

Answer: See explanation

Explanation:

The magnitude of the deadweight loss resulting from the externality is shown below:

MC = 500 + 2Q

MEC = 40 + 2Q

Therefore, the Marginal social cost (MSC) will be:

= MC + MEC

= 500 + 2Q + 40 + 2Q

= 540 + 4Q

Since Demand: Q = 150,000 - 100P, we have to get a function for P which will be:

Q = 150,000 - 100P

100P = 150,000 - Q

P = (150,000 - Q)/100

P = 1,500 - 0.01Q

Total revenue, TR = P x Q

= (1,500 - 0.01Q) × Q

= 1500Q - 0.01Q²

Marginal revenue, MR will be:

= dTR / dQ

= 1,500 - 0.02Q

It should be noted that for when there's no externality, Equilibrium, MC must be equal to MR. Therefore,

1,500 - 0.02Q = 500 + 2Q

2Q + 0.02Q = 1500 - 500

2.02Q = 1,000

Q = 1000/2.02

Q = 495

P = 1,500 - (0.01 x 495)

= 1,500 - 4.95

= 1,495.05

When there's externality, Equilibrium will be:

MR = MSC

1,500 - 0.02Q = 540 + 4Q

4.02Q = 960

Q= 960/4.02

Q = 239

Therefore, P = 1,500 - (0.01 x 239)

= 1,500 - 2.39

= 1,497.61

Then, we will calculate the deadweight loss which will be:

= 1/2 x Difference in price x Difference in quantity

= 1/2 x (1,497.61 - 1,495.05) x (495 - 239)

= 1/2 x 2.56 x 256

= 327.68

3 0
2 years ago
"When aggregate demand​ increases," A. the price level is likely to fall as GDP rises. B. aggregate supply will shift to the rig
stira [4]

Answer:

D. the price level is likely to rise as GDP rises.

Explanation:

The aggregate demand measures all the goods produced in an economy at a given price in a particular period.

When the aggregate demand increases, the aggregate demand curve shifts to the right. When aggregate demand increases, aggregate demand exceeds aggregate supply and aggregate price and output would increase.

7 0
2 years ago
Other questions:
  • Which of the following is not a cost posed by inflation? Inflation reduces the affordability of goods and services to the averag
    5·1 answer
  • Daily Farm is a manufacturer of consumer goods such as foods, beverages, cleaning agents, and personal care products. It is expe
    9·1 answer
  • Full meaning of NeRsA
    15·2 answers
  • Brandon and jane forte file a joint tax return and decide to itemize their deductions. the forte's income for the year consists
    14·1 answer
  • A postsecondary school that does not have a set of admission requirements such as a minimum GPA or test scores is called
    11·1 answer
  • A broker received a very high offer on a piece of property from a buyer. Bill makes a low offer through a "dummy" purchaser, or
    11·1 answer
  • The Master Budget You are currently working as a contractor building state of the art airports. One of the managerial accountant
    13·1 answer
  • Two firms, A and B, each currently dump 50 tonnes of chemicals into the local river. From now on both firms will require a pollu
    6·2 answers
  • The most common implementation of a quantity discount at the consumer level is the _______ discount.
    9·1 answer
  • Question 1 A business wants to evaluate their campaign, and specifically wants to look at how much net profit after investments
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!