Kizspy | Question: 6
(Choose 1 answer)
(27611) A farmer sells 4 million bushels of corn at a spot price of $2.10 per bushel. The total cost of production was $9.2 million. The farmer has an effective tax rate of 25%. If the farmer entered into a futures contract at a price of $2.40 per bushel on 4 million bushels, what is the farmer's net loss or gain?
A. $100,000 loss
B. $800,000 loss
C. $300,000 gain
D. $400,000 gain
