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:

Absorption Costing

Absorption costing is an accounting method that includes both variable and fixed manufacturing costs in the cost of a product.

Net Operating Income

A financial metric that calculates the profit generated from a company's operations, excluding taxes and interest.

Net Operating Income

The profit generated from a company's everyday business operations, excluding expenses from interest and taxes.

Net Operating Income

A financial metric that calculates a company's profitability by subtracting operating expenses from gross profit.