TIPS FOR READING AN EXCHANGE RATE CHART: Read down the chart. For example, in column 1 it says the US Dollar is equal to each of the currencies below it. Therefore $1 = .76 £ or $1 = .89 €. Exchange Rate Table for Month 1   US Dollar $1 = British Pound 1 £ = Chinese Yuan 1 Y = Japanese Yen 1 ¥ = Euro 1€ US Dollar --- 1.32 .16 .0088 1.13 British Pound .76 --- .12 .0067 .85 Chinese Yuan 6.37 8.46 --- .056 7.21 Japanese Yen 113.04 149.55 17.75 --- 127.55 Euro .89 1.17 .14 .0078 ---   Exchange Rate Table for Month 2   US Dollar $1 = British Pound 1 £ = Chinese Yuan 1 Y = Japanese Yen 1 ¥ = Euro 1€ US Dollar --- 1.40 .20 .0080 1.17 British Pound .70 --- .11 .0065 .89 Chinese Yuan 6.20 8.72 --- .062 7.59 Japanese Yen 116.24 146.89 16.32 --- 117.2 Euro .92 1.11 .15 .0078 ---   An American company contracts a Japanese architect to design a new building in Seattle for 8,075,000 dollars.  How much (in Yen) would it cost the American firm in month 1?  Month 2?  So in which month would the American company prefer to pay off the contract? Explain your answer using the numbers from the chart above (show your math

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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TIPS FOR READING AN EXCHANGE RATE CHART: Read down the chart. For example, in column 1 it says the US Dollar is equal to each of the currencies below it. Therefore $1 = .76 £ or $1 = .89 €.

Exchange Rate Table for Month 1

 

US Dollar

$1 =

British Pound

1 £ =

Chinese Yuan

1 Y =

Japanese Yen

1 ¥ =

Euro

1€

US Dollar

---

1.32

.16

.0088

1.13

British Pound

.76

---

.12

.0067

.85

Chinese Yuan

6.37

8.46

---

.056

7.21

Japanese Yen

113.04

149.55

17.75

---

127.55

Euro

.89

1.17

.14

.0078

---

 

Exchange Rate Table for Month 2

 

US Dollar

$1 =

British Pound

1 £ =

Chinese Yuan

1 Y =

Japanese Yen

1 ¥ =

Euro

1€

US Dollar

---

1.40

.20

.0080

1.17

British Pound

.70

---

.11

.0065

.89

Chinese Yuan

6.20

8.72

---

.062

7.59

Japanese Yen

116.24

146.89

16.32

---

117.2

Euro

.92

1.11

.15

.0078

---

 

An American company contracts a Japanese architect to design a new building in Seattle for 8,075,000 dollars.  How much (in Yen) would it cost the American firm in month 1?  Month 2?  So in which month would the American company prefer to pay off the contract? Explain your answer using the numbers from the chart above (show your math

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Based on the reading and the table above, is the exchange rate of dollars to pounds fixed or flexible?  Explain your answer.

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