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Chapter 11.4, Problem 11.11RQ

Explain how the terminal cash flow is calculated for replacement projects.

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Mary decides to buy a Treasury note futures contract for delivery of $100,000 face amount in September, at a price of 120′24.0. At the same time, Eric decides to sell a Treasury note futures contract if he can get a price of 120′24.0 or higher. The exchange, in turn, agrees to sell one Treasury note contract to Mary at 120′24.0 and to buy one contract from Eric at 120′24.0. The price of the Treasury note decreases to 120′10.5. Calculate Eric's balance on margin account.  Assume that initial margin is $1,890.         Please note that loss should be entered with minus sign.   Round the answer to two decimal places.
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Chapter 11 Solutions

Principles of Managerial Finance, Student Value Edition Plus MyLab Finance with Pearson eText - Access Card Package (15th Edition) (Pearson Series in Finance)

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