BHP Billiton is the world's largest mining firm. BHP expects to produce 2.00 billion pounds of copper next year, with a production cost of $0.95 per pound.

a. What will be BHP's operating profit from copper next year if the price of copper is $1.05, $1.40, or $1.75 per pound, and the firm plans to sell all of its copper next year at the goingpice?

b. What will be BHP's operating profit from copper next year if the firm enters into a contract to supply copper to end users at an average price of $1.35 per pound?

c. What will be BHP's operating profit from copper next year if copper prices are described as in part (a), and the firm enters into supply contracts as in part (b) for only 50% of its totaloutput?

Answer rating: 100% (QA)

a To calculate BHPs operating profit from copper next year at different copper prices Operating Prof... View the full answer