Determine the added benefit cost

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Reference no: EM1356200

As an oil refiner, you are able to produce $76 worth of unleaded gasoline from one barrel (Bbl) of Alaska N0rth 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. Alaska North Slope crude oil is currently selling for $71.75/Bbl, while West Texas Intermediate crude oil is currently selling for $73.06/Bbl. Another refiner is offering to privately trade you 10,150 Bbls of ANS crude oil for 10,000 Bbls of WTI crude. (Assume you currently have at least 10,000 Bbls of WTI crude in inventory.)

What should you do? What is the added benefit to you of this course of action?

Reference no: EM1356200

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