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Question
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
Answer
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Related questions
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