Engineering Economy
16th Edition
ISBN: 9780133582819
Author: Sullivan
Publisher: DGTL BNCOM
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Chapter 8, Problem 61FE
To determine
Calculate the values in euro.
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What is the cross rate between Taiwan Dollar (TWD) and the Denmark Krone (DMK) if the following rates are observed:
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0.1933
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Let’s suppose you (USA dealer) imported a product from German on Dec 1, 2018 at € 300, payable in 60 days. You sold the product in the US market at $400 in cash on Dec 15, 2018. The company's fiscal year ends on Dec 31. You paid to your German supplier on Feb 1, 2019.
Below, please find the exchange rate information:
Dec 1, 2018: 0.8 €/$..
Dec 31, 2018: 1.5 €/$.
Feb 1, 2019: 0.6 €/$.
What was net income for 2018 and 2019, respectively?
Group of answer choices
-$200, -$100
-$100, $200
$300, -$200
$200, -$300
A South American country has had a high rate of inflation. Recently, its
exchange rate was 15 lunas per dollar. It is likely that the country will
continue to experience a 25% inflation rate and that the US will continue at
a 3% inflation rate. Assume that the exchange rate will vary the same as the
inflation. In this situation, one dollar will buy how many lunas FIVE years
from now?
39.40 lunas
30.14 lunas
45.78 lunas
$42.56 lunas
Chapter 8 Solutions
Engineering Economy
Ch. 8 - Prob. 1PCh. 8 - Prob. 2PCh. 8 - Prob. 3PCh. 8 - Prob. 4PCh. 8 - Prob. 5PCh. 8 - Prob. 6PCh. 8 - Prob. 7PCh. 8 - Prob. 8PCh. 8 - Prob. 9PCh. 8 - Prob. 10P
Ch. 8 - Prob. 11PCh. 8 - Prob. 12PCh. 8 - Prob. 13PCh. 8 - A commercial building design cost 89/square-foot...Ch. 8 - Prob. 15PCh. 8 - Prob. 16PCh. 8 - Prob. 17PCh. 8 - Prob. 18PCh. 8 - Prob. 19PCh. 8 - Prob. 20PCh. 8 - Prob. 21PCh. 8 - Prob. 22PCh. 8 - Prob. 23PCh. 8 - Prob. 24PCh. 8 - Prob. 25PCh. 8 - Prob. 26PCh. 8 - Prob. 27PCh. 8 - Prob. 28PCh. 8 - Prob. 29PCh. 8 - Prob. 30PCh. 8 - Prob. 31PCh. 8 - Prob. 32PCh. 8 - Prob. 33PCh. 8 - Prob. 34PCh. 8 - Prob. 35PCh. 8 - Prob. 36PCh. 8 - Prob. 37PCh. 8 - Prob. 38PCh. 8 - Prob. 39PCh. 8 - Prob. 40PCh. 8 - Prob. 41PCh. 8 - Prob. 42PCh. 8 - Prob. 43PCh. 8 - Prob. 44PCh. 8 - Prob. 45PCh. 8 - Prob. 46PCh. 8 - Prob. 47PCh. 8 - Prob. 48PCh. 8 - Prob. 49SECh. 8 - Prob. 50SECh. 8 - Prob. 51SECh. 8 - Prob. 52CSCh. 8 - Suppose the cost of electricity is expected to...Ch. 8 - Prob. 54CSCh. 8 - Prob. 55FECh. 8 - Prob. 56FECh. 8 - Prob. 57FECh. 8 - Prob. 58FECh. 8 - Prob. 59FECh. 8 - Prob. 60FECh. 8 - Prob. 61FE
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- The current political and economic crisis deepened in Malaysia in 2021. Many currency forecasters were predicting that the RM would fall an additional 20% from its September 30th value by the end of 2022. Required: 1. What was the percentage change in the value of the RM relative to the US dollar during September 2022? 2. What was the forecast RM/USD exchage rate for end 2022?arrow_forwardIn a recent e-news, you observe that the 6-month forward rate is $1.5031/ Euro. Further, if you invest the dollar, it fetches you interest at the rate of 2% p.a. In comparison, the interest rate in Eurozone is 1% p.a. You also see that CAD 1.5513 are needed to purchase a Euro and CAD1.332 are needed to buy a US$. Is it possible for you to make an arbitrag profit? If so, which of the arbitrage strategies will you employ and what will be the profit? Assume that interest rate parity holds, and you have one million dollars available to conduct arbitrage. Please show all necessary workings and explanation.arrow_forwardSuppose the annual interest rates in the U.S. (home nation) and the U.K (foreign nation) are 8% and 6%, respectively. A U.K. interest arbitrager decides to invest £10,000 in the U.S for three months. Given that the current spot rate is $2 per pound, calculate the EUD from investing in the U.S., assuming that on the maturity date the U.S. dollar is expected to depreciate by 1%. Interpret your result.arrow_forward
- Suppose Australia has an annual 6% inflation rate, while the annual growth rate of the nominalexchange rate, expressed in euros per Australian dollar, is 4%. If purchasing power parity holds,what is the annual inflation rate in the Eurozone?arrow_forwardThe euro-pound cross exchange rate can be computed as: A. S(E/E) = S($/E) × S(€/S) %3D B. S($/£) S(E/S) S(€/£) = S(€/£) = S($/€) S(£/S) D. all of the abovearrow_forwardSuppose that a U.S. company wishes to purchase goods from a German producer. The U.S. firm agrees to take the delivery of the goods in three months and to pay €1 million Euros at that time. This company wishes to avoid this exchange rate risk by buying Euros at the 3-month forward rate, f = 0.95 (€/$). Then, how much this company would have to pay in US dollars in exchange for €1 million Euros? a. $1 million dollars. b. $1,052,632 dollars. c. $950,000 dollars.arrow_forward
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