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Heinz uses 1000 tons of corn syrup each year as an ingredient in its tomato ketchup products. Heinz is concerned about the increase in prices
Heinz uses 1000 tons of corn syrup each year as an ingredient in its tomato ketchup products. Heinz is concerned about the increase in prices of cornbased products and purchases a fixedpricec ontract to buy corn syrup at $20,000 per ton. What is the impact on earnings before taxes as opposed to no hedging if the price of corn is $25,000 per ton over the nextyear?
A.$5,000
B.+$5 million
C.$5million
D.+$5,000
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