Question

BHP Billiton is the world’s largest mining firm. BHP expects to produce 2 billion pounds of...

  1. BHP Billiton is the world’s largest mining firm. BHP expects to produce 2 billion pounds of copper next year, with a production cost of $0.80 per pound.

a. What will be BHP’s operating profit from copper next year if the firm enters into a contract to supply copper to end users at the price of $1.4 per pound?

b. What would be profit/loss from the hedge if the price of copper next year is $1.20 or $1.75 per pound? Sketch profit/ loss profile as the function of market price

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

ANSWER IN THE IMAGE ((YELLOW HIGHLIGHTED). FEEL FREE TO ASK ANY DOUBTS. THUMBS UP PLEASE.

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
Unfortunately it’s a familiar chain of events in the mining industry: junior mining partner makes a...
Unfortunately it’s a familiar chain of events in the mining industry: junior mining partner makes a discovery in a faraway land. Junior mining company sinkssignificant amounts of capital into the ground to establish a world-class resource. The discovery attracts the interest of powerful local business concerns and/or governments. The deposit is seized under suspicious circumstances and the junior mining company’s shareholders are annihilated. This story has played out all over the world from Venezuela to Mongolia to the Democratic Republic...
Delta airlines case study Global strategy. Describe the current global strategy and provide evidence about how...
Delta airlines case study Global strategy. Describe the current global strategy and provide evidence about how the firms resources incompetencies support the given pressures regarding costs and local responsiveness. Describe entry modes have they usually used, and whether they are appropriate for the given strategy. Any key issues in their global strategy? casestudy: Atlanta, June 17, 2014. Sea of Delta employees and their families swarmed between food trucks, amusement park booths, and entertainment venues that were scattered throughout what would...
Sign In INNOVATION Deep Change: How Operational Innovation Can Transform Your Company by Michael Hammer From...
Sign In INNOVATION Deep Change: How Operational Innovation Can Transform Your Company by Michael Hammer From the April 2004 Issue Save Share 8.95 In 1991, Progressive Insurance, an automobile insurer based in Mayfield Village, Ohio, had approximately $1.3 billion in sales. By 2002, that figure had grown to $9.5 billion. What fashionable strategies did Progressive employ to achieve sevenfold growth in just over a decade? Was it positioned in a high-growth industry? Hardly. Auto insurance is a mature, 100-year-old industry...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT