On March 1,you Contract to Take Delivery of 1 Ounce

question 35

Multiple Choice

On March 1,you contract to take delivery of 1 ounce of gold for $415. The agreement is good for any day up to April 1. Throughout March,the price of gold hit a low of $385 and hit a high of $435. The price settled on March 31 at $420,and on April 1^st you settle your futures agreement at that price. Your net cash flow is:

• A) -$30.
• B) -$20.
• C) -$15.
• D) $5.
• E) $20.

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Definitions:

Property, Plant, Equipment

Long-term tangible assets used in the operation of a business and not intended for resale.

Operating Activities

Operating activities relate to the primary business activities of a company, such as production, distribution, and marketing, which generate revenue and expenses reflected in the income statement.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including material, labor, and overhead costs.

Comparative Balance

A financial statement that presents the financial position of a company at two or more different points in time, for the purpose of evaluating financial health and performance.