Ocean water contains 0.9 ounce of gold per ton. Method A costs $230 per ton of water processes and will recover 85% of the metal. Method B costs $270 per ton of water processed and will recover 65% of the metal. The two methods require the same investment and are capable of producing the same amount of gold each day. If the extracted gold can be sold for $400 per ounce, which method of extraction should be used? Assume that the supply of ocean water is unlimited. Show complete solutions
Ocean water contains 0.9 ounce of gold per ton. Method A costs $230 per ton of water processes and will recover 85% of the metal. Method B costs $270 per ton of water processed and will recover 65% of the metal. The two methods require the same investment and are capable of producing the same amount of gold each day. If the extracted gold can be sold for $400 per ounce, which method of extraction should be used? Assume that the supply of ocean water is unlimited. Show complete solutions
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Ocean water contains 0.9 ounce of gold per ton. Method A costs $230 per ton of water processes and will recover 85% of the metal. Method B costs $270 per ton of water processed and will recover 65% of the metal. The two methods require the same investment and are capable of producing the same amount of gold each day. If the extracted gold can be sold for $400 per ounce, which method of extraction should be used? Assume that the supply of ocean water is unlimited.
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