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Bhp operating pro?t from copper

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BHP Billiton is the wortd's largest mining ?rm. BHP expects to produce 1.50 billion pounds of copper next year, with a production cost of $0.90 per pound.

a. What will be BHP's operating pro?t from copper next year if the price of copper is $1.20, $1.40, or $1.60 per pound, and the ?rm plans to sell all of its copper next year at the going price?

b. What will be BHP's operating pro?t from copper next year if the ?rm enters into a contract to supply copper to end users at an average price of $1 .35 per pound?

c. What will be BHP's operating pro?t from copper next year if copper prices are described as in part (a), and the ?rm enters into supply contracts as in part (b) for only 50% of its total output?

Reference no: EM133057513

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