Question
BHP Billiton is the worlds largest mining firm. BHP expects to produce 2 billion pounds of copper next year, with a production cost of $0.80
- BHP Billiton is the worlds largest mining firm. BHP expects to produce 2 billion pounds of copper next year, with a production cost of $0.80 per pound.
a. What will be BHPs operating profit from copper next year if the firm enters into a contract to supply copper to end users at the price of $1.4 per pound?
b. What would be profit/loss from the hedge if the price of copper next year is $1.20 or $1.75 per pound? Sketch profit/ loss profile as the function of market price
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Accounting Comes Alive The Color Accounting Parable
Authors: Mark Robilliard ,Peter Frampton, Chang Chang, Mark Morrow, John Gorman
1st Edition
1450769608, 978-1450769600
