Metaverse Chocolate Company (MCC) is a collaboration between two founding partners, one with extensive industry experience producing
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Question:
MCC will offer its upscale customers the ability to custom-create small-batch chocolate bars blended to their exact specifications with regard to cacao content and the addition of coffee and/or nuts. MCC will operate as an online-only platform that will accept payment only in Ethereum, currently the most transactionally efficient cryptocurrency.
MCC will to begin production in January of 2023, and is seeking a supply deal for a 12 month forward term.
MCC is seeking a contract priced in Ethereum, and will pay all invoiced amounts in Ethereum. As part of the due-diligence process, as a good-faith gesture, MCC is willing to disclose to the supplier a cryptocurrency wallet that contains Ethereum sufficient to pay for the estimated value of the first three months of the contract.
MCC seeks the following base volumes of cacao, coffee and tree nuts by month (all figures in kg):
Evaluate the risks inherent in the Metaverse Chocolate Company mini-case. The Metaverse Chocolate Company has contacted your firm with a Request for Proposal for a transaction. At a bank or merchant, as a trader your responsibility would be to review the proposal and, if deemed interesting, decompose the risks and figure out how to price the transaction. Read through their proposal and identify as many risks as you can, then rank them in order of severity to the economic outcome of the transaction. Do you think a bank can price all of them, or are there some that you consider deal breakers?
Related Book For
Cost Management A Strategic Emphasis
ISBN: 978-0077733773
7th edition
Authors: Edward Blocher, David Stout, Paul Juras, Gary Cokins
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