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Suppose that the managers purchase the required Lithium Carbonate in the spot market on July 15 at a price of $ 51185.4 per metric ton.
Suppose that the managers purchase the required Lithium Carbonate in the spot market on July 15 at a price of $ 51185.4 per metric ton. On the same day, the managers close out their futures contract position when the Lithium Hydroxide futures price is $ 64535.42 per kilogram. (1,000 kilograms = 1 metric ton). What is the effective total net cost which the firm will incur for the required 6 metric tons of Lithium Carbonate?
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