Question

Using scenario analysis, a nickel mine finds that its revenue increases as the market price of...

Using scenario analysis, a nickel mine finds that its revenue increases as the market price of nickel increases despite a fall in customer sales due to higher prices. Which of the following best describes the financial risk exposure of the company?
Select one:
a. The company has a long economic exposure to nickel prices.
b. The company has a neutral economic exposure to nickel prices.
c. The company has a short economic exposure to its customers.
d. The company has a short economic exposure to nickel prices.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The Company has less customer base. However, it will increase the revenue through charging high premium to less customers irrespective of fall in customer base. But, in the long run if the nickel prices falls then the company must suffer the loss because it does not have the enough customer base to pick up their revenue forward. Therefore, the company has long economic exposure to nickel prices.

Therefore, option A is considered as optimum i.e The Company has a long economic exposure to nickel prices.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
32. If the company E-bikes R US is a price taker, then its marginal revenue will...
32. If the company E-bikes R US is a price taker, then its marginal revenue will always equal A) price. B) total cost. C) zero. D) one. 33. The company E-bikes R US operates in a competitive market. If E-bikes R US is in short-run equilibrium, then A) profits equal zero. B) it will not operate at a loss. C) an increase in its fixed cost will have no effect on profit. D) an increase in its fixed cost will...
for the scenario below: 1) Apply the qualitative analysis by identifying at least 3 issues in...
for the scenario below: 1) Apply the qualitative analysis by identifying at least 3 issues in the above process. Analyse these issues by using a. Adding-value and Waste Analysis b. Issue register, If you find that there are more than three issues, you can focus on the three issues that have the highest impact. 2). Calculate the cycle time efficiency of the as-is process. You can assume a working week of 40 hours. In case there is missing information, you...
Assessing Drivers of Business Growth 9-At which stage of the firm lifecycle would a company most...
Assessing Drivers of Business Growth 9-At which stage of the firm lifecycle would a company most likely have high business risk, low financial risk, and generate neutral net cash flow? Review Later A-Maturity B-Decline C-Growth D-Launch 10-Read the following passage and determine which value proposition the business has for creating solid relationship with its customers. Innovation Co. is an international smartphone manufacturer which currently holds more than 15% of global smartphone market share. One of the superior product features it...
20.After the completion of a project, its revenue is not as expected due to the existence...
20.After the completion of a project, its revenue is not as expected due to the existence of a new substitute product that causes the demand for the services is low. This causes the project unable to generate sufficient income to repay the loan. This refers to(1 Point) Resource risk Operational risk Market risk Completion risk 21.What is financial repression?(1 Point) Financial depress of banks during financial crises Financial injection by the government to help banks from becoming insolvent High level...
7. A bank has a SME customer who is over-trading. While its sales and profit growth...
7. A bank has a SME customer who is over-trading. While its sales and profit growth are impressively high, the firm’s leverage and liquidity have been consistently eroded and have now reached a danger zone. Generous dividends continue to be paid. The bank is unwilling to extend more credit. The best solution(s) going forward would be: * a Improve profitability b Improve asset efficiency by liquidating surplus assets (if any) c Cut back dividends d Reduce growth rate or invest...
Which one of the following statements is true? Select one: a. Traditional Keynesian analysis indicates that...
Which one of the following statements is true? Select one: a. Traditional Keynesian analysis indicates that increases in government purchases are a more potent tool than decreases in taxes. b. According to Keynesians, fiscal policy is the first line of defense against economic downturns. c. Advocates of sacrifice ration claim that a zero-inflation target imposes only small costs on society. d. Sacrifice ration implies that a credible commitment to reducing inflation can lower the costs of disinflation by inducing a...
Six months ago, Albert was named director of his family's company; a factory dedicated to the...
Six months ago, Albert was named director of his family's company; a factory dedicated to the production of parts for automobiles. When the company was founded, it was a resounding success because it was one of the first factories devoted to this production. However, over time, good competitors have been born, and the factory has had to deal with a series of serious problems that still entails and that Albert has proposed to face to recover stability and bonanza of...
choose correct answer 1)The difference between manufacturer's desire to produce large quantities of a limited variety...
choose correct answer 1)The difference between manufacturer's desire to produce large quantities of a limited variety of items vs. a customer's desire to demand small quantities of numerous items best describes which of the following?        Discrepancy in space        Discrepancy in quantity and assortment        Discrepancy in time        Discrepancy in logistics 2)Developing long-term relationships with key supply chain participants (e.g., consumers, intermediate customers, and suppliers) can be best described as:        Relationship marketing...
Traditionally the typical college level Business Law course focused students' attention on acting within the minimum...
Traditionally the typical college level Business Law course focused students' attention on acting within the minimum standards set by the law. Unfortunately, many businesses and business leaders view the law (and it's setting of minimum standards of behavior) as the pinnacle of what they should strive to do. Ethics focuses more on what is right, regardless of whether or not it is legal. Consider the following hypothetical scenario: The MAJOR GROCERY STORE chain provides discounts to customers on product purchases...
1) If the Federal Reserve conducts an open market purchase, we can expect that the short-run...
1) If the Federal Reserve conducts an open market purchase, we can expect that the short-run Phillips curve will shift left. the short-run Phillips curve will shift right. t here will be a movement to the right along the short-run Phillips curve. there will be a movement to the left along the short-run Phillips curve. the long-run Phillips curve will shift right. 2) In the long run, the Phillips Curve shows that the natural rate of unemployment is independent of...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT