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1. ABC Mining Inc. bought a option for P1,225. The option allows ABC to sell 10 tons of copper at a price of P30,200 per ton one month from now. If on the exercise date, a ton of copper sells for P29,600, how much is the net benefit obtained by ABC from the contract>

1. ABC Mining Inc. bought a option for P1,225. The option allows ABC to sell 10 tons of copper at a price of P30,200 per ton one month from now. If on the exercise date, a ton of copper sells for P29,600, how much is the net benefit obtained by ABC from the contract>

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Topic: Option Pricing

When computing, please do not round off. Only final answers must be rounded off to two decimal places.

1. ABC Mining Inc. bought a option for P1,225. The option  allows ABC to sell 10 tons of copper at a price of  P30,200 per ton one month from now. If on the exercise  date, a ton of copper sells for P29,600, how much is the  net benefit obtained by ABC from the contract>

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