Jefferson Company Entered into a Forward Contract with Washington Company

question 8

Essay

Jefferson Company entered into a forward contract with Washington Company on October 1,2014,under which Jefferson agreed to buy (and Washington agreed to sell)10,000 tons of coal at $80.00 per ton in 90 days.On October 1,2014,the price of coal is $82.00 per ton.On December 29,2014,the price of coal is $85.00 per ton.The contract allows for net settlement.
Required:
Determine the net settlement on the forward contract.

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Definitions:

Undesirable Behaviours

Undesirable behaviours are actions or reactions that are not in alignment with expected social, professional, or organizational standards.

Reinforcement Strategy

Techniques used to guide behavior by reinforcing desired actions and discouraging undesired ones through rewards or penalties.

Operant Conditioning

A method of instruction where the potency of a conduct is adjusted by means of incentives or disciplinary measures.

Negative Reinforcement

A behavioral strategy in which the removal of an undesirable or negative outcome follows a desired behavior, thereby increasing the likelihood of that behavior being repeated.