A Steel Maker Needs 5,000,000 Tons of Coal Next Year

question 44

Multiple Choice

A steel maker needs 5,000,000 tons of coal next year.The current market price for coal is $70.00 per ton.At this price,the firm expects its EBIT to be $500 million.What will the firm's EBIT if the firm enters into a supply contract for coal for a fixed price of $72.00 per ton?

• A)$500 million
• B)$510 million
• C)$490 million
• D)$350 million
• E)$410 million

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