see the image You are the finance manager of Oman Flour Mills. Oman flour mills imports 600 tons of wheat from Australia permonth. The mill uses the wheat for production of bread. On 15t April spot price of Australian wheat is 1400 $ perton. The finance manager is worried that by end of April spot price of Australian wheat will rise to 2000 $ per ton.To protect the company against the sharp rise in input cost of wheat, on 15t April the finance manager purchasedChicago wheat NDF forward contracts for end of April expiry (30 April expiry) from ADM Chicago at forward rate of1450 per ton. The finance manager feels that by end of April price of Chicago wheat NDF forward will rise to 2050per ton. The finance manager is interested in hedging and not speculation.The problem is that Chicago wheat is not suitable for Oman Flour Mills for production of bread. Even if Oman FlourMills takes delivery of the wheat from ADM Chicago, it will not be able to use it.Why did the finance manager book Chicago wheat forward? Did he make a mistakeO a. The settlement process will ensure that cost of wheat for Oman Flour mills will be 1400 per tonO b. He made a mistakeOc. He should have booked a futures contractO d. He wants to make a profit of 600 per ton for Oman Flour MillsO e. None of these

Production is the process of mixing the inputs and material to make the output for consumption.

Why did the finance manager book Chicago wheat forward? Did he make a mistake O a. The settlement process will ensure that cost of wheat for Oman Flour mills will be 1400 per ton O b. He made a mistake Oc. Heshould have booked a futures contract O d. He wants to make a profit of 600 per ton for Oman Flour Mills Oe. None of these

Why did the finance manager book Chicago wheat forward? Did he make a mistake O a. The settlement process will ensure that cost of wheat for Oman Flour mills will be 1400 per ton O b. He made a mistake Oc. Heshould have booked a futures contract O d. He wants to make a profit of 600 per ton for Oman Flour Mills Oe. None of these

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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