Oil is selling at a spot price of $42.00 per barrel. Oil can be stored at a cost of $0.42 per barrel per month
The opportunity cost of capital is 7.2% per year (or 0.6% per month). What is the gain or loss realized by an oil refinery that floats its exposure and purchases oil on the spot market in 2 months at a price of $43.00 per barrel, instead of hedging with a forward contract?
A) $0.35 gain
B) $0.35 loss
C) $1.00 gain
D) $1.00 loss
A
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Briefly describe the three stages of the business cycle that all economies go through
What will be an ideal response?
At the beginning of the year, your company borrows $20,000 by signing a four-year promissory note that states an annual interest rate of 8% plus principal repayments of $5,000 each year. Interest is paid at the end of the second and fourth quarters, whereas principal payments are due at the end of each year. How does this new promissory note affect the current and non-current liability amounts reported on the classified balance sheet prepared at the end of the first quarter?
A. Increase current liabilities by $1,600; increase non-current liabilities by $20,000. B. Increase current liabilities by $5,400; increase non-current liabilities by $20,000. C. Increase current liabilities by $5,400; increase non-current liabilities by $15,000. D. Increase current liabilities by $400; increase non-current liabilities by $20,000.
Even if a firm's average variable cost remains constant per unit, its average cost will increase as output increases.
Answer the following statement true (T) or false (F)
Why must marketers NOT view a social medium as a connector?
A) Connectors are only found in traditional non-interactive media. B) Social media have limited appeal, reach, and influence over young consumers. C) Social media are vehicles for connecting marketers with connectors who then share opinions with the larger community. D) Product claims on the Internet are not verifiable, and most consumers do not trust social media. E) Social media are so new that marketers are still unsure of effective ways to wage public relations campaigns in this environment.