Ocean water contains 0.9 ounce of gold per ton. Method A costs $220 per ton of w
ID: 1826322 • Letter: O
Question
Ocean water contains 0.9 ounce of gold per ton. Method A costs $220 per ton of water processed and will recover 85% of the metal. Method B costs $160 per ton of water processed and will recover e of the metal. The two methods require the same investment and are capable of producing the same amount of gold each day. If the extracted gold can be sold for $1,350 per ounce, which method of extraction should be used? Assume that the supply of ocean water is unlimited. Work this problem on the basis of profit per ounce of gold extracted.Explanation / Answer
0.9 ounce gold per ton of water for a 1000$ investment per day, the amount of gold recovered by process A is (1000 / 220) * 0.9 * 0.85 ounces = 3.477 ounces approximately for a 1000$ investment per day, the amount of gold recovered by process B is (1000 / 160) * 0.9 * e = 3.477 (according to the given condition) so e = 0.6181 or 61.81 % By process A the cost of extracting one ounce of gold is 1 ounce gold = 244.44$ By process B the cost of extracting one ounce of gold is 1 ounce gold = 177.77$ Money earnt in selling by process A = 1 * 0.85 *1350 = 1147.5$ Money earnt in selling by process B = 1 * 0.6181 *1350 = 834.43$ Profit in A = 1147.5 - 244.44 = 903.06$ Profit in B = 834.43- 177.77 = 665.66$ Profit per ounce of Gold extracted is greater in process A.
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