The use of money and credit controls to change macroeconomic activity is known as:

Suppose that you have wheat in storage and that the price of wheat is currently $5.00 per bushel. You can sell your wheat immediately but you also have an opportunity to sell in six months. At that time, you believe the price of wheat will be $5.60 per bushel. Your cost of storage is $0.75 per bushel for six months. One dollar in six months is worth one dollar today (no discounting). What strategy is profit maximizing?

A. Hold onto your wheat and sell in six months. B. Sell your wheat today. C. Minimize your losses by exiting the wheat market. D. Expand production to sell more wheat.

If the interest rate is 5% then the net present value of these cash flows is

a. $6,020.41 b. $7,380.95 c. -$7,380.95 d. $10,000