Question
The Big Cheese Corporation (Big) needs 1,000,000 wheels of aged parmesan reggiano cheese in two years. The Big Cheese Corporation negotiates a forward contract with
The Big Cheese Corporation (Big) needs 1,000,000 wheels of aged parmesan reggiano cheese in two years. The Big Cheese Corporation negotiates a forward contract with the Foreign Cheese Company (Foreign). The spot price of a wheel of parmesan reggiano is $100. Foreign has an 8% rate of return and 5% annual holding costs. What will the total contract price be for the forward contract between Big and Foreign?
| $113,000,000 | ||
| $133,210,000 | ||
| $123,210,000 | ||
| $0 |
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Last Rights Liquidating A Company
Authors: Ben Branch, Hugh Ra, Robin Russell
1st Edition
0195306988, 978-0195306989
