Suppose That the Current Price of Oil Is $60 a Barrel

question 89

Multiple Choice

Suppose that the current price of oil is $60 a barrel and the interest rate is 3%.If the National Petroleum company extracts and sells its oil at $60 a barrel today and the revenue is invested,what will be its value per barrel at the end of year 2?

• A)$60
• B)$63
• C)$63.6
• D)$66

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Definitions:

Inventory Value

The cost or market value of all the goods and materials held by a company for the purpose of resale.

Purchasing Power Parity

An economic theory that compares different countries' currencies through a "basket of goods" approach to assess relative currency value.

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The official currency of Canada, represented by the symbol CAD or C$ and denoted by the ISO code "CAD".

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Specialized footwear designed for playing hockey, featuring a blade attached to the bottom for gliding on ice.