The treasurer of company a expects to receive a cash inflow of $15,000,000 in 90 days. the treasurer expects short-term interest rates to fall during the next 90 days. in order to hedge against this risk, the treasurer decides to use a fra that expires in 90 days and is based on 90-day libor. the fra is quoted at 5%. at expiration, libor is 4.5%. assume that the notational principal on the contract is $15,000,000. a. indicate whether the treasurer should take a long or short position to hedge interest rate risk b. using the appropriate terminology, identifying the type of fra used here c. calculate the gain or loss to company a as a consequence of entering the fra

Solomon chemical company makes three products, b7, k6, and x9, which are joint products from the same materials. in a standard batch of 320,000 pounds of raw materials, the company generates 70,000 pounds of b7, 150,000 pounds of k6, and 100,000 pounds of x9. a standard batch costs $3,840,000 to produce. the sales prices per pound are $10, $14, and $20 for b7, k6, and x9, respectively. (a) allocate the joint product cost among the three final products using weight as the allocation base. (b) allocate the joint product cost among the three final products using market value as the allocation base. (c) allocate the joint product cost among the three final products using weight as the allocation base.