A Farmer Sells Futures Contracts at a Price of $2

question 20

Multiple Choice

A farmer sells futures contracts at a price of $2.75 per bushel. The spot price of corn is $2.55 at contract expiration. The farmer harvested 12,500 bushels of corn and sold futures contracts on 10,000 bushels of corn.
What are the farmer's proceeds from the sale of corn?

• A) $27,500
• B) $31,875
• C) $33,875
• D) $35,950

Understand customer behavior in queues, including balking, jockeying, and reneging.

Understand the financial benefits of sales discounts and their impact on reducing the delay in cash flow.

Comprehend the concept and purpose of purchase allowances in resolving customer satisfaction issues.

Recognize the role of price reductions in facilitating the sale of damaged or defective merchandise.

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Definitions:

Pricing Structure

The strategic arrangement of prices within a company's portfolio of products or services, aimed at achieving financial goals and market competitiveness.

Fares

The prices paid for journeys on public transportation like buses, trains, and airplanes.

Break-Even Point

The point at which the number of units sold generates just enough revenue to equal the total costs; at this point, profits are zero.

Profit

The financial gain realized when the amount of revenue earned from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.