The Table Below Describes the Value Added in the Production

question 124

Essay

The table below describes the value added in the production of a gallon of gasoline by each stage of production.(The values are hypothetical.)
Table 12-10
$\begin{array}{|l|l|l|}\hline \text { Stage of Production } & \text { Value of Sales } & \text { Value Added } \\\hline \text { Oil drilling } & 0.75 & \\\hline \text { Refining } & 1.25 & \\\hline \text { Shipping } & 1.85 & \\\hline \text { Retail sales } & 3.65 & \\\hline\end{array}$
a)What is the value added by each stage of production?
b)What is the total value added?
For simplicity,you can ignore the cost of the inputs for oil drilling.

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Definitions:

Obligation

A legal or moral duty to do something or pay an amount to someone.

Compounded Monthly

Interest calculation method where the interest is added to the principal at the end of each month, resulting in "interest on interest".

Interest

The cost of borrowing money, typically expressed as an annual percentage rate.

Scheduled Payments

Predetermined amounts paid at regular intervals as part of a loan agreement or payment plan.