Heinz Uses 2000 Tons of Corn Syrup Each Year as an Ingredient

question 23

Multiple Choice

Heinz uses 2000 tons of corn syrup each year as an ingredient in its tomato ketchup products.Heinz is concerned about the increase in prices of corn-based products and purchases a fixed-price contract to buy corn syrup at $20,000 per ton.What is the impact on earnings before taxes as opposed to no hedging if the price of corn is $15,000 per ton over the next year?

• A)+$5 million
• B)-$10 million
• C)$0
• D)+$10 million
• E)-$5 million

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Motivation

A psychological force that compels individuals to act toward the achievement of goals.

Attractiveness

The qualities or features of an entity that make it appealing or desirable to others.

Predetermined Wage Grades

An established set of salary levels defined before recruitment, often based on job analysis, to classify positions according to value and responsibility.

Job Classification System

A method of evaluating and categorizing positions within an organization based on duties, responsibilities, and the level of expertise required, often used to determine salary ranges.