Diwali Airlines Has a Contract That Gives Them the Opportunity

question 103

Multiple Choice

Diwali Airlines has a contract that gives them the opportunity to purchase up to 10,000,000 gallons of jet fuel at $2.00 per gallon.The current market price of jet fuel is $2.26 per gallon.Divali believes they will only need 6,000,000 gallons of jet fuel.What is the value of this opportunity?

• A)$1,560,000
• B)$2,600,000
• C)$1,040,000
• D)$9,040,000

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Definitions:

Constants

Fixed values in an equation or model that do not change, unlike variables which can fluctuate.

GDP

Gross Domestic Product, the total value of all goods and services produced over a specific time period within a country's borders.

Depression

A deep and prolonged business downturn; the last one occurred in the 1930s.

Velocity of Circulation

The rate at which money moves through the economy, from transactions of individuals and businesses.