Question
In: Finance
A-Corp can supply 50,000 metric tons (MT) of crude palm oil (CPO) to L-Brothers on 15th...
A-Corp can supply 50,000 metric tons (MT) of crude palm oil (CPO) to L-Brothers on 15th March 2021. The current CPO price is $3400 per MT. It is expected that the CPO could be trading at $2700 per MT on 15th March 2021. The FCPO (CPO Futures) is currently trading at $3450 per MT. Each FCPO contract is 25 MTs. If the FCPO is trading at $2100 per MT on 15th March 2021, calculate the net sales revenue of A-Corp in this supply transaction if it decides to hedge by using FCPO contracts
Solutions
Expert Solution
first we calculate no. of FCPO contracts purchased by A-corp.
no. of FCPO contracts purchased = total volume/volume per contract = 50,000 MT/25 MT = 2,000
net sales revenue = no. of FCPO contracts purchased*(Futures price - spot price at expiration)
net sales revenue = 2,000*($3,450 - $2,100) = 2,000*$1,350 = $2,700,000
the net sales revenue of A-Corp in this supply transaction if it decides to hedge by using FCPO contracts is $2,700,000.
jeff jeffy answered 2 years agoRelated Solutions
1) A power plant with an efficiency of 65% combusts 500,000 metric tons (MT) of anthracite...
1) A power plant with an efficiency of 65% combusts 500,000
metric tons (MT) of anthracite coal per year to generate
electricity. It has been established that this type of coal has the
capacity to generate electrical energy at 19 GJ/MT.
a) How much energy in GJ (giga joules) does this plant generate
in one year?
b) Estimate the annual emissions of criteria pollutants
including SO2, NOx, PM and greenhouse gases including CO2 and CO
using the appropriate emission factors...
Unioil produces vegetable-based cooking oil and butter spreads. Unioil uses large quantities of crude palm oil...
Unioil produces vegetable-based cooking oil and butter spreads.
Unioil uses large quantities of crude palm oil (CPO)in its
production process as a main raw material. It is September 2020 now
and Unioil estimates a need of 25,000 metric tons (MTs)of CPO in
March 2021. Current spot price of CPO is RM2200 per MT. You as the
procurement manager of Unioil, have the following alternatives to
hedge the possible increase in the CPO price by March 2021:
[EACH OPTION (a, b,...
Unioil produces vegetable based cooking oil and butter spreads. Unioil uses large quantities of crude palm...
Unioil produces vegetable based cooking oil and butter spreads.
Unioil uses large quantities of crude palm oil (CPO)in its
production process as a main raw material. It is September 2020 now
and Unioil estimates a need of 25,000 metric tons (MTs)of CPO in
March 2021. Current spot price of CPO is RM2200 per MT. You as the
procurement manager of Unioil, have the following alternatives to
hedge the possible increase in the CPO price by March 2021:
The commodities analysist...
Unioil produces vegetable based cooking oil and butter spreads. Unioil uses large quantities of crude palm...
Unioil produces vegetable based cooking oil and butter spreads.
Unioil uses large quantities of crude palm oil (CPO)in its
production process as a main raw material. It is September 2020 now
and Unioil estimates a need of 25,000 metric tons (MTs)of CPO in
March 2021. Current spot price of CPO is RM2200 per MT. You as the
procurement manager of Unioil, have the following alternatives to
hedge the possible increase in the CPO price by March 2021:
a) The commodities...
Unioil produces vegetable based cooking oil and butter spreads. Unioil uses large quantities of crude palm...
Unioil produces vegetable based cooking oil and butter spreads.
Unioil uses large quantities of crude palm oil (CPO)in its
production process as a main raw material. It is September 2020 now
and Unioil estimates a need of 25,000 metric tons (MTs)of CPO in
March 2021. Current spot price of CPO is RM2200 per MT. You as the
procurement manager of Unioil, have the following alternatives to
hedge the possible increase in the CPO price by March 2021:
The commodities analysist...
Unioil produces vegetable based cooking oil and butter spreads. Unioil uses large quantities of crude palm...
Unioil produces vegetable based cooking oil and butter spreads.
Unioil uses large quantities of crude palm oil (CPO)in its
production process as a main raw material. It is September 2020 now
and Unioil estimates a need of 25,000 metric tons (MTs)of CPO in
March 2021. Current spot price of CPO is RM2200 per MT. You as the
procurement manager of Unioil, have the following alternatives to
hedge the possible increase in the CPO price by March 2021:
The commodities analysist...
The rate of crude oil production from 2008 to 2013 by an oil company can be...
The rate of crude oil production from 2008 to 2013 by an oil
company can be approximated by ?(?) = 6.2?^2 − 146? + 1910 million
barrels per year where ? is time in years since the start of 2000.
During that time, the price of oil was approximately ?(?) =
47?^0.046? dollars per barrel. Obtain an expression for the total
oil revenue ?(?) from the start 0f 2008 to the start of year ? as a
function of ?....
Crude oil between 2015-2019 Use the model of supply and demand and provide a textual and...
Crude oil between 2015-2019
Use the model of supply and demand and provide a textual and
diagrammatic explanation, using the supply and demand curves for
the changes in the prices of the good
1.1. Crude oil needs to be cleaned before it can be refined - explain what crude desalting is and why it is needed.
1.1. Crude oil needs to be cleaned before it can be refined - explain what crude desalting is and why it is needed. 1.2. Separation of the crude oil into refined products is done by fractional distillation, very shortly describe the process and explain why it is necessary to separate the residue at reduced pressure.
On 1 February 2014, MM Islamic Bank entered into a Salam Financing contract with Linggi Estate in Negeri Sembilan to supply 100 metric tonnes of Grade A palm oil at RM500 per tonnes (RM50,000)
On 1 February 2014, MM Islamic Bank entered into a Salam Financing contract with Linggi Estate in Negeri Sembilan to supply 100 metric tonnes of Grade A palm oil at RM500 per tonnes (RM50,000). Linggi is to deliver the palm oil on 15 October 2014. On 10 May 2014, the bank entered into a Parallel Salam contract to supply the same to Oleo Sdn Bhd. The sale to Oleo is RM600 per tonnes (RM60,000) and palm oil is to be...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- More and more adults are considering commuting to work by bicycle rather than car, but few...
- Please answer these questions Data Processing and Analysis using python. Thank you In statistics, an outlier...
- Write a function file that accepts each of the four vectors as inputs. The function file...
- Kant says that to act morally is to act out of duty. How does this differ...
- Suppose you are trying to determine the capacity (in gallons) of the gas tank needed on...
- List the arithmetic operators used in BASIC and state their priorities of execution in a statement....
- Describe the espoused values of a company you have worked for (or been exposed to -...
ADVERTISEMENT