You Would Like to Lock in the Selling Price on 50,000

question 14

Multiple Choice

You would like to lock in the selling price on 50,000 bushels of wheat, which you plan to harvest and deliver to the market in September. The September futures price quote is currently 899΄4. If you write September futures contracts on your wheat, you will be guaranteed a total price of ________ for your crop. Each contract is quoted in cents and 1/8ths of a cent per bushel with a contract size of 5,000 bushels.

• A)$45,637.50
• B)$541,650.00
• C)$449,750.00
• D)$297,700.50
• E)$2,977,000.25

---

Definitions:

Manufacturing Tools

Instruments, machines, or related items used in the manufacturing process to produce goods and products.

Obsolete

Refers to products, technologies, or methods that are out-of-date or no longer in use.

Simple Interest Loan

A loan where interest is calculated only on the principal amount, not on accumulated interest.

Net Advantage To Leasing

The financial benefits that accrue to a business when leasing assets as opposed to purchasing them, often considered in terms of cost savings and tax advantages.