User Account

All Pages

Production of catalytic converters

Assignment Help Finance Basics
Reference no: EM131877562

Phoenix Motors wants to lock in the cost of 10,000 ounces of platinum to be used in next quarter's production of catalytic converters. It buys 3-month futures contracts for 10,000 ounces at a price of $1,650 per ounce.

a. Suppose the spot price of platinum falls to $1,500 in 3 month's time. Does Phoenix have a profit or loss on the futures contract?

b. Has it locked in the cost of purchasing the platinum it needs?

c. How does your answer to (a) change if the spot price of platinum increases to $1,800 after 3 months?

d. How does your answer to (b) change?

Reference no: EM131877562

Questions Cloud

How netflix changed the entertainment rental industry : Netflix was a pioneer in the market that put the ‘old-fashioned' DVD rentals to history and knocked Blockbuster out of business.
Working or educational environment : Select one (1) project from your working or educational environment for which you would apply the DOE technique for the work process.
Discuss the reason why capital investment projects : Discuss the reason why capital investment projects should be evaluated for risk in the present, and how risk might be involved in future planning
Distinguish between cash receipts and cash disbursements : Class, cashflow is the difference between cash receipts and cash disbursements for a given accounting period. It is critical for every administrator to ensure.
Production of catalytic converters : Phoenix Motors wants to lock in the cost of 10,000 ounces of platinum to be used in next quarter's production of catalytic converters.
What items of input must the user enter : What items of input must the user enter? Once the input has been entered, how will the program determine the average? What output will the program display?
Consumer confidence survey : One of the indices that economists use to gauge consumer expectations is the consumer confidence survey. This is an indirect measure of consumer expectations
Define what might be some good strategies : HP has found themselves with a short term part shortage situation that is affecting their ability to cover customer demand of a key mid-range computer model.
What is the url of the web site : What is the URL of the Web site? Is this page appealing or unappealing? List three reasons for your answer.

Reviews

Write a Review

Finance Basics Questions & Answers

  What is your total nominal return on this investment

Today, the required return on this stock is 8 percent and you just sold all of your shares. What is your total nominal return on this investment?

  What is the ytm-stone sour corp

Stone Sour Corp. issued 15-year bonds 2 years ago at a coupon rate of 9.10 percent. The bonds make semiannual payments. If these bonds currently sell for 103 percent of par value, what is the YTM?

  Probability of experiencing neither of the side effects

With use of a specified prescription drug. There is a 30% chance of experiencing nose bleeds and a 50% chance of experiencing migraines. There is a 15% chance of experiencing both. What is the probability of experiencing neither of the side effect..

  Another way to handle deletion from hash tables

Another way to handle deletion from hash tables for names whose scope has been passed (as in Section 7.6) is to leave expired names on a list until that list is again searched.

  Who is right and why

AAAU tells Ford that they must fire the "scabs" who were hired during the strike so their union members can have their jobs back. Ford says that they aren't going to fire anyone and they don't have to. Who is right and why?

  Describe siosan utility function

Describe Siosan's utility function. Contrast her utility function with that assumed in traditional finance theory.

  How much will be in the account after the ninth deposit

Suppose you make annual deposits of $ 3,000 in an account that pays annual compound interest of 4.5 % over the investment period. How much will be in the account after the ninth deposit ?

  What is the weighted average cost of capital

The firm estimates its after-tax cost of debt to be 6%, cost of preferred stock to be 8%, and cost of new common stock to be 15%. What is the weighted average cost of capital?

  You just borrowed 130000 to buy a condo you will repay the

you just borrowed 130000 to buy a condo. you will repay the loan in equal monthly payments of 882.42 over the next 30

  Do you see any limits to starbucks growth

Do you see any limits to Starbucks’s growth?

  Industry analysts estimate that the replacement tire market

after extensive research and development goodweek tires inc. has recently developed a new tire the supertreadand must

  How is the shopping experience different for the service

At many optical stores, you can get your eyes checked and purchase glasses or contact lenses. How is the shopping experience different for the service.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd