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Question
A maker of breakfast cereals has contracted to buy 100,000 bushels of wheat for $8.50 a bushel at the end of October. On the delivery date, the spot price of wheat is $8.70 per bushel. Which of the following is true?A) The seller of the contract has $20,000 profit.
B) The buyer of the contract has a $20,000 loss.
C) The buyer of the contract has a $20,000 profit
D) Both A and B are true
Answer
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Related questions
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A new forklift under consideration by Home Warehouse requires an initial investment of $100,000 and produces annual cash flows of $50,000, $40,000, and $30,000. Which of the following will not change if the required rate of return is increased from 10% to 12%.
A) The net present value.
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C) The profitability index.
D) The modified internal rate of return.
Q:
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Year 2 = $3,000
Year 3 = $9,000
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The equivalent annual cost method is most appropriate in which of the following situations? In each case, assume that several mutually exclusive options are available.
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B) Adding another store to a chain of retail stores
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Q:
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