You are a buyer for a battery company and are investigating the purchase

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Q1.You are a buyer for a battery company and are investigating the purchase of lithium from an African company for $100 per barrel and $14 per barrel to process and package it before shipping. This particular source requires an 15 month lead time with material and packaging costs paid up front (at time order is placed). Transportation is $4 per barrel and paid when received. If the risk free annual interest rate is 10%, what is the value per barrel after received in the U.S.? If it is received 3 months late, how much is invested per barrel when it is received? Assume monthly compounding.

  • 9 years ago
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