A Farmer Sells 4 Million Bushels of Corn at a Spot

question 20

Multiple Choice

A farmer sells 4 million bushels of corn at a spot price of $2.10 per bushel.The total cost of production was $9.2 million.The farmer has an effective tax rate of 25%.If the farmer entered into a futures contract at a price of $2.40 per bushel on 4 million bushels,what is the farmer's net loss or gain?

• A) $100,000 loss
• B) $800,000 loss
• C) $300,000 gain
• D) $400,000 gain

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Definitions:

Spinal Nerve

A nerve that emerges from the spinal cord and consists of both motor and sensory fibers, providing communication between the spinal cord and the body.

Central Canal

The fluid-filled space running longitudinally through the length of the entire spinal cord, containing cerebrospinal fluid.

Anesthesia

A medical procedure involving the administration of agents that result in a state of temporary loss of sensation or awareness.