Question

BHP Billiton is the​ world's largest mining firm. BHP expects to produce 1.75 billion pounds of copper next​ year, with a production cost of $ 0.80 per pound. a. What will be​ BHP's operating profit from copper next year if the price of copper is $ 1.30​, $ 1.60​, or $ 1.90 per​ pound, and the firm plans to sell all of its copper next year at the going​ price? b. What will be​ BHP's operating profit from copper next year if the firm enters into a contract to supply copper to end users at an average price of $ 1.55 per​ pound? c. What will be​ BHP's operating profit from copper next year if copper prices are described as in part ​(a​), and the firm enters into supply contracts as in part ​(b​) for only 50 % of its total​ output? d. For each of the situations​ below, indicate which of the strategies ​(a​), ​(b​), or ​(c​) might be optimal. a. What will be​ BHP's operating profit from copper next year if the price of copper is $ 1.30​, $ 1.60​, or $ 1.90 per​ pound, and the firm plans to sell all of its copper next year at the going​ price? The operating profit when the price per pound is $ 1.30 will be ​$ nothing billion.  ​(Round to two decimal​ places.

Answer 1