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In six months, a cereal company plans to sell 40,000 boxes of Corn Crisps for $4.50 per box and will need to buy 20,000 bushels
In six months, a cereal company plans to sell 40,000 boxes of Corn Crisps for $4.50 per box and will need to buy 20,000 bushels of corn to do so. In doing so, it also incurs non-corn costs of $79,000. The current spot price of corn is $4.50 per bushel, and the six-month forward price is $4.64. Assuming the company remains unhedged, what total profit would it earn if the market price of corn in six months is $3.90, $4.30, $4.70, and $5.10, respectively?
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