Phelps petroleum company must decide between two methods

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Phelps Petroleum Company must decide between two methods of processing oil at a refinery. Method 1 has fixed costs of $22000 for depreciation, maintenance, and taxes, whereas the fixed costs for Method 2 are $30000. The variable costs depend on the chemical additives used and the heating requirements. These are $0.019 and $0.014 per barrel for Methods 1 and 2 respectively.

Reference no: EM1387246

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