Consider a chocolate maker that will need 10,000 tons of cocoa beans next year. Suppose the...

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Consider a chocolate maker that will need 10,000 tons of cocoabeans next year. Suppose the current market price of cocoa beans is$1400 per ton. At this price, the firm expects earnings beforeinterest and taxes of $22 million next year. What will the firm'sEBIT be if the price of cocoa beans rises to $1950 per ton? Whatwill EBIT be if the price of cocoa falls to $1200 per ton? Whatwill EBIT be in each scenario if the firm enters into a supplycontract for cocoa beans for a fixed price of $1450 per ton?

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Chocolate maker need Coco beans 10000 tons price per ton 1400 EBIT at this price 22000000 a Coco beans is input for maker so if cost increases EBIT will decline Coco beans price next See Answer

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Consider a chocolate maker that will need 10,000 tons of cocoabeans next year. Suppose the current market price of cocoa beans is$1400 per ton. At this price, the firm expects earnings beforeinterest and taxes of $22 million next year. What will the firm'sEBIT be if the price of cocoa beans rises to $1950 per ton? Whatwill EBIT be if the price of cocoa falls to $1200 per ton? Whatwill EBIT be in each scenario if the firm enters into a supplycontract for cocoa beans for a fixed price of $1450 per ton?