Question: Please help me with the below question Stenback Petroleum has spent $205,000 to refine 60,000 gallons of petroleum distillate, which can be sold for $6.10

Please help me with the below question

Stenback Petroleum has spent $205,000 to refine 60,000 gallons of petroleum distillate, which can be sold for $6.10 a gallon. Alternatively, Stenback can process the distillate further and produce 56,000 gallons of cleaner fluid. The additional processing will cost $1.75 per gallon of distillate. The cleaner fluid can be sold for $9.20 a gallon. To sell cleaner fluid, Stenback must pay a sales commission of $0.13 a gallon and transportation charge of $0.19 a gallon

Requirements

1. Fill in the diagram for Stenback's alternatives

2, Identify the sunk cost. Is the sunk cost relevant to Stenbacks decision?

3. Should Stenback sea the petroleum distillate a process it into cleaner fluid? Show the expected net revenue difference between the two alternatives

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