Bundle: Fundamentals of Financial Management, 15th + MindTap Finance, 1 term (6 months) Printed Access Card
15th Edition
ISBN: 9781337817417
Author: Eugene F. Brigham, Joel F. Houston
Publisher: Cengage Learning
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Chapter 19, Problem 5P
Summary Introduction
To determine: The Country U dollars required to purchase 1,000 units of each given currency.
Introduction:
Exchange rate is at which one currency of a country is exchanged with the currency of another country is termed as exchange rate.
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On December 20, 2017, Butanta Company (a U.S. company headquartered in Miami, Florida) sold parts to a foreign customer at a price of 50,000 ostras. Payment is received on January 10, 2018. Currency exchange rates for 1 ostra are as follows:
December 20, 2017 $1.05December 31, 2017 1.02January 10, 2018 0.98a. How does the fluctuation in exchange rates affect Butanta’s 2017 income statement?b. How does the fluctuation in exchange rates affect Butanta’s 2018 income statement?
The table lists foreign exchange rates for August 30, 2018. On that day, how many dollars would be required to purchase 1,000 units of each of the following: British pounds, Canadian dollars, EMU euros, Japanese yen, Mexican pesos, and Swedish kronas? Use the direct quotation for your calculations. Round your answers to the nearest cent.
Sample Exchange Rates: Thursday, August 30, 2018
Direct Quotation:U.S. Dollars Required toBuy One Unit ofForeign Currency(1)
Indirect Quotation:Number of Units ofForeign Currency perU.S. Dollar(2)
Australian dollar
0.7264
1.3767
Brazilian real
0.2409
4.1504
British pound
1.3009
0.7687
Canadian dollar
0.7702
1.2984
Chinese yuan
0.1461
6.8448
Danish krone
0.1565
6.3889
EMU euro
1.1670
0.8569
Hungarian forint
0.00357015
280.10
Israeli shekel
0.2767
3.6136
Japanese yen
0.00901
110.99
Mexican peso
0.0523
19.1133
South African rand
0.0679
14.7205
Swedish krona
0.1096
9.1200
Swiss franc
1.0317
0.9693
Venezuelan bolivar…
Introduction to Exchange Rates and the Foreign Exchange Market - EOC
Refer to the exchange rates given in the table to answer the questions. Please round your answer to the nearest ten thousandths.
Country (currency)
January 20, 2016
FX per $
January 20, 2015
FX per £
FX per €
FX per $
Australia (dollar)
1.459
2.067
1.414
1.223
Canada (dollar)
1.451
2.056
1.398
1.209
Denmark (krone)
6.844
9.694
7.434
6.430
Eurozone (euro)
0.917
1.299
1.000
0.865
Hong Kong (dollar)
7.827
11.086
8.962
7.752
India (rupee)
68.05
96.39
71.60
61.64
Japan (yen)
116.38
164.84
136.97
118.48
Mexico (peso)
18.60
26.346
16.933
14.647
Sweden (krona)
8.583
12.157
9.458
8.181
United Kingdom (pound)
0.706
1.000
0.763
0.600
United States (dollar)
1.000
1.416
1.156
1.000
a. What was the US dollar to Japanese yen exchange rate on January 20, 2016?
116.38
Es
Incorrect
b. What was the US dollar to Japanese yen exchange rate on January 20, 2015?
ES:
118.48
Incorrect
c. What was the percentage change in the value of the US…
Chapter 19 Solutions
Bundle: Fundamentals of Financial Management, 15th + MindTap Finance, 1 term (6 months) Printed Access Card
Ch. 19 - Why do U.S. corporations build manufacturing...Ch. 19 - Prob. 2QCh. 19 - Prob. 3QCh. 19 - Should firms require higher rates of return on...Ch. 19 - Does interest rate parity imply that interest...Ch. 19 - Prob. 6QCh. 19 - Prob. 7QCh. 19 - Prob. 1PCh. 19 - Prob. 2PCh. 19 - INTEREST RATE PARITY Six-month T-bills have a...
Ch. 19 - Prob. 4PCh. 19 - Prob. 5PCh. 19 - Prob. 6PCh. 19 - CURRENCY APPRECIATION Suppose that 1 Danish krone...Ch. 19 - Prob. 8PCh. 19 - Prob. 9PCh. 19 - INTEREST RATE PARITY Assume that interest rate...Ch. 19 - PURCHASING POWER PARITY In the spot market, 17.6...Ch. 19 - INTEREST RATE PARITY Assume that interest rate...Ch. 19 - SPOT AND FORWARD RATES Arvin Australian Imports...Ch. 19 - EXCHANGE GAINS AND LOSSES You are the vice...Ch. 19 - Prob. 15PCh. 19 - Prob. 16PCh. 19 - FOREIGN CAPITAL BUDGETING Sandrine Machinery is a...Ch. 19 - Prob. 18SPCh. 19 - Prob. 19IC
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