Homework: Assignment #10 (Chapter 14) Score: 0 of 4 pts Problem 14 Save 12 of 12 (10 complete) HW Score: 64.58%, 1 5.5 of 24 pt Question Help , Eastmark Electrical Equipment Manufacturers needs to secure its supply of copper for the next year. The price of copper is extremely volatile because of huge month-to-month variation in demand. Eastmark wants to break even with a hedge against future copper prices. Currently, the market price for copper is reasonably low at $2.50 per pound or $250 (CWT). Eastmark has entered into a contract with the supplier for 400,000 pounds of copper per month starting in January at market prices. Eastmark has also entered into a futures contract with a financial institution for 400,000 pounds per month at $2.50 per pound. CWT (hundredweight) is equal to 100 pounds in the United States. Suppose the futures contact is still in force in February a. However, assume the firm has just lost a key client's business and only purchases 375000 pounds of copper i. Calculate the one month financial and the physical results if the market price of copper has risen to $3.50 per pound Calculate only the financial impact of copper transactions and disregard the loss of revenue due to business loss Enter your answer in the answer box and then click Check Answer Homework: Assignment #10 (Chapter 14) Score: 0 of 4 pts Problem 14 Save 12 of 12 (10 complete) HW Score: 64.58%, 1 5.5 of 24 pt Question Help , Eastmark Electrical Equipment Manufacturers needs to secure its supply of copper for the next year. The price of copper is extremely volatile because of huge month-to-month variation in demand. Eastmark wants to break even with a hedge against future copper prices. Currently, the market price for copper is reasonably low at $2.50 per pound or $250 (CWT). Eastmark has entered into a contract with the supplier for 400,000 pounds of copper per month starting in January at market prices. Eastmark has also entered into a futures contract with a financial institution for 400,000 pounds per month at $2.50 per pound. CWT (hundredweight) is equal to 100 pounds in the United States. Suppose the futures contact is still in force in February a. However, assume the firm has just lost a key client's business and only purchases 375000 pounds of copper i. Calculate the one month financial and the physical results if the market price of copper has risen to $3.50 per pound Calculate only the financial impact of copper transactions and disregard the loss of revenue due to business loss Enter your answer in the answer box and then click Check
