Suppose today is December 4, 2020, and your firmproduces breakfast cereal and needs 135,000 bushelsof corn in March 2021 for an upcoming promotion. Youwould like to lock in your costs today because you areconcerned that corn prices might go up between nowand March. Use Table 25.2 a. What is the total priceyou are locking in for the 135,000 bushels of cornbased on the day's closing price? (Do not roundintermediate calculations and round your answer to thenearest whole number, e.g., 32.) b. Suppose cornprices are $4.71 per bushel in March. What is the profitor loss on your futures position? (Enter your answer as apositive value. Do not round intermediate calculationsand round your answer to the nearest whole number, e.g., 32.)

a. We need to know the precise closing price of the corn futures contract for delivery in March 2021…

Answered: Suppose today is December 4, 2020, and…

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter4: Preparing And Using Financial Statements

Section: Chapter Questions

Problem 1eM

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Give typing answer with explanation and conclusion Hanson’s financial forecast is estimating this year’s revenue to be $40 million. Holden Tank’s Board of Directors are concerned that this year’s corn prices will fall significantly. They wish to use the agricultural options market3 to provide insurance against falling corn prices reducing revenue. How can they do this and how many options should be used?
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A chain of take-away pizza stores is considering introducing a new line of gluten-free pizzas. Net revenue from the new line of pizzas is expected to total $500,000 per year, but 15% of this net revenue is forecast to consist of people switching from the regular pizzas to the gluten-free pizzas. How would you describe this situation in terms of the NPV analysis upon which the situation will be based. Question 1Answer a. There is a negative externality equal to $425,000 which should be included in the NPV analysis for the gluten-free pizza project. b. There is a positive externality equal to $425,000 which should be included in the NPV analysis for the gluten-free pizza project. c. There is a positive externality equal to $75,000 which should be included in the NPV analysis for the gluten-free pizza project. d. There is a negative externality equal to $75,000 which should be included in the NPV analysis for the gluten-free pizza project.
Solve the following problem. Round dollar amounts to the nearest cent. Round other amounts to the nearest tenth. Write rates as percents to the nearest tenth of a percent.
Consumer prices rose 1.0% in May 2022 and 1.3% in June 2022. One of your relatives made the claim that consumer prices rose more than 2.3% over the two-month period covered by May and June. Is this person correct or not? If your relative is correct, justify this claim with calculations, explaining why you're making the calculations you are and showing how much prices actually rose over the two month period as a percentage. If your relative is incorrect, explain their error, using calculations and explanation to back up your claim.
Last year, a mother In a small African nation could buy a pound of flour for the U.S equivalent of $1.30. Six months ago, an identical pound of flour costs $3.40. Today she would need $5.60 to buy that pound of flour. This example of the general upward movement of prices is called: a. Deflation b. Inflation c. Supply-side pricing d. Discretionary pricing e. Profit maximization pricing
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A farmer wants to sell future harvest of wheat at the current rate of Rs.18, but he fears that the wheat prices might fall in the next 3 months. In this case, he enters a contract with a grocery store for selling them 1000kgs of wheat at Rs.18 in 3 months. Draw the pay-off chart for the farmer.
After a successful year for your beach shop, you are wondering whether to open one more store this year. There are equal chances for the coming summer to be rainy or sunny. If the weather is sunny, you will earn $55,000 in profits per store. However, if the weather is rainy, your profit will be $35,000 if you open one store and zero if you open two stores. What is your expected profit under complete information? O A $110,000 OB. $55,500 OC. $90,000 D. $72,500
1. Your new company is planning to make and sell customized mailboxes. You have set startup costs of $2046. Each mailbox costs you $34 to make. If you plan to sell your mailboxes for $49.50, how many must you make and sell to break even? Explain the how you determined the answer. 2. If the retail price is fixed at $1.00, what effect does increasing the retail and wholesale margins have on the manufacturer's selling price? Explain why this is the case. 3. Define unit contribution in your own words. Is a high or low unit contribution preferable for profitability? 4. How do increases in the retail and wholesale margins (again, with a fixed retail price) affect the unit contribution? Why? 5. If you increase any of the fixed cost factors, what happens to the number of units the company needs to sell to break even? To the market share necessary to achieve breakeven?. 6. What change (increase or decrease) to the following factors increases the profit impact? Decreasing retail margin/unit…
F1. Use the Panera annual report to answer this question. You are going to start a fast casual restaurant similar to Panera, You need to figure out what your cost of goods sold will be. You decide to use the 2012 Panera numbers for your assumed cost of goods sold. In particular, you use the "Cost of Food and Paper Products" line item as the basis of your cost of goods sold. You know to compare this to the revenue item "Bakery Cafe Sales, Net". Based on this, what would be a reasonable assumption for your cost of goods sold as a percentage of sales?

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