1. Chris purchased a call option on Nov 18 th 2016 for $500. The Option gave him the right to buy 100 shares of Vectron stocks for $45 per share. He sold option for $550 on Dec 15 th 2017 when the price of the stock was $48 a share. How much capital gain should report on his 2017 return?
A-$0
B-$50
C-$200
D-$300
2. How spot rate and forward rate affects the annual cash flow? Also the importance of hedging too?
3. Explain all the reasons why it is necessary to calculate depreciation on an old and/or new asset when estimating a project's net cash flow?