In September of 2014,Gunny Corporation anticipates that the price of heating oil will increase soon,and wishes to lock in a firm price for the winter months.They enter into a forward contract with Selton Industries to buy 100,000 barrels of oil at $160 per barrel in December 2014.Selton's cost of production of the heating oil is $120 per barrel.
Required:
Determine the economic impact of the transaction to Selton (the seller of the heating oil)at the market price levels indicated in the table below,with and without the hedge.
Correct Answer:
Verified
Q22: On November 4,2014,the Oak Corporation,a U.S.corporation,purchased components
Q30: Piel Corporation (a U.S.company)began operations on January
Q31: Tank Corporation,a U.S.manufacturer,has a June 30 fiscal
Q32: On September 1,2014,Bylin Company purchased merchandise from
Q34: Lincoln Corporation,a U.S.manufacturer,both imports needed materials and
Q34: On November 1,2014,the Yankee Corporation,a U.S.corporation,purchased and
Q35: A review of Ace Industries,a U.S.corporation,shows the
Q35: On October 15,2014,Napole Corporation,a French company,ordered merchandise
Q37: Plymouth Corporation (a U.S.company)began operations on September
Q40: Blue Corporation,a U.S.manufacturer,sold goods to their customer
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents