Cronus Airlines has a contract that gives them the opportunity to purchase up to 7000000 gallons of jet fuel at $4 per gallon. The current market price of jet fuel is $4.2 per gallon. Cronus believes they will only need 5000000 gallons of jet fuel. What is the value of this opportunity? OA. $1,000,000 OB. $400,000 OC. $1,400,000 OD. $2,000,000 (EXO)

Cronus Airlines has a contract that gives them the opportunity to purchase up to 7000000 gallons of jet fuel at $4 per gallon. The current market price of jet fuel is $4.2 per gallon. Cronus believes they will only need 5000000 gallons of jet fuel. What is the value of this opportunity? OA. $1,000,000 OB. $400,000 OC. $1,400,000 OD. $2,000,000 (EXO)

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 16P: Shao Airlines is considering the purchase of two alternative planes. Plane A has an expected life of...

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