Kizspy | Question: 7 (Choose 1 answer)
(27607) KidCo Cereal Company sells "Sugar Corns" for $2.50 per box. The company will need to buy 20,000 bushels of corn in 6 months to produce 40,000 boxes of cereal. Non-corn costs total $60,000. What is the company's profit if they purchase call options at $0.12 per bushel with a strike price of $1.60? Assume the 6-month interest rate is 4.0% and the spot price in 6 months is $1.65 per bushel.
A. $6,504 profit
B. $8,005 loss
C. $12,064 profit
D. $11,293 loss
