A Farmer Growing Cocoa Beans Enters into a Contract with a Chocolate

question 52

Multiple Choice

A farmer growing cocoa beans enters into a contract with a chocolate factory. According to the contract, the chocolate factory will buy a ton of cocoa beans from the farmer at the price of $2,200 per ton next month. A day after the contract is signed the price of cocoa beans falls to $2,000 per ton. If the farmer and the chocolate factory go ahead with the contract:

• A) the farmer will have lost $200.
• B) the chocolate factory will have lost $200.
• C) the farmer will have lost $2,000.
• D) the chocolate factory will have lost $2,200.

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Definitions:

Timeliness

The characteristic of occurring at a suitable or opportune time, particularly relevant in the context of information delivery and project completion.

Future Cost

Costs that have not yet been incurred but are expected to be as a result of current decisions or plans.

Information

Data that has been processed, organized, or presented in a manner that makes it meaningful or useful to the person receiving it.

Accounting Data

Information related to financial transactions and status, used for analysis, planning, and decision-making in business.