Assume that GTB Petroleum Corporation, a U.S. company, is involved in petroleumoperations in Gabon. The production sharing contract it signed with governmentprovides the following:1. Royalty 15%2. Cost oil 40%3. Profit oil split 80% to Govemment and 20% to the Contractor4. Oil price $22Based on the above information, you are required to answer the following questions:1. What is the total profit?a. $11.22b. $13.20c. $18.70d. $9.902. The division of profit ($) is:a. $11.22 government; $1.98 contractorb. $7.92 government; $1.98 contractorc. $11.22 government; $10.78 contractord. $14.96 government; $3.74 contractor3. What is the division of profit in percentage (%)?a. 80% government; 20% contractorb. 51% government; 49% contractorc. 60% government; 40% contractord. 85% government; 15% contractor4. The split of the barrel in dollars ($) is:a. $11.22 government; $1.98 contractorb. $7.92 govemment; $1.98 contractorc. $11.22 government; $10.78 contractord. $14.96 government; $3.74 contractor5. The profit oil is shareda. $11.22 government; $1.98 contractorb. $7.92 government; $1.98 contractorc. $11.22 government; $10.78 contractord. $14.96 government; $3.74 contractor

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Answered: Assume that GTB Petroleum Corporation,…

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter1: Introduction And Goals Of The Firm

Section: Chapter Questions

Problem 2.2CE

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