Gas in the United States costs $3.67/gallon, in Canada it's $1.32/L, and the Canadian dollar is worth 95¢ in U.S. currency. Where should you fill up?
Gas in the United States costs $3.67/gallon, in Canada it's $1.32/L, and the Canadian dollar is...
Suppose the spot exchange rate for the Canadian dollar is Can$1.07 and the six-month forward rate is Can$1.09. a. Which is worth more, a U.S. dollar or a Canadian dollar? O U.S. dollar Canadian dollar b. Assuming absolute PPP holds, what is the cost in the United States of an Elkhead beer if the price in Canada is Can$2.60? (Round your answer to 3 decimal places, e.g., 32.161.) Cost in U.S. dollars c. Is the U.S. dollar selling at a...
Suppose the spot exchange rate for the Canadian dollar is Can$1.12 and the six-month forward rate is Can$1.17. (Enter your answers as directed, but do not round intermediate calculations.) a. Which is worth more, a U.S. dollar or a Canadian dollar? b. Assuming absolute PPP holds, what is the cost in the United States of an Elkhead beer if the price in Canada is Can$2.49? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)...
Suppose that you go on vacation to Canada every summer. Last year, the hotel room where you stayed cost C$100 per night, and it costs the same this year. The exchange rate was 1.04 USS/C$ last year, and it is 0.95 US$/C$ this year. This means you will pay than you paid last year. per night this year The U.S. dollar-Canadian dollar exchange rate is essentially the price of a Canadian dollar in terms of U.S. dollars. When this price...
BASE CASE CHANGE SCENARIO 1 CHANGE SCENARIO 2 United States 500,000 500,000 500,000 Canada 500,000 550,000 400,000 Mexico 300,000 330,000 240,000 COST OF GOODS SOLD 1,300,000 1,380,000 1,140,000 Price paid per gallon $1.30 $1.38 $1.14 Selling price per gallon (USD) $1.50 $1.55 $1.20 Revenue $1,500,000 $1,550,000 $1,220,000 Cost of goods sold (1,300,000) (1,380,000) (1,140,000) Gross profit 200,000 170,000 80,000 SG&A (50,000) (50,000) (50,000) Operating profit 150,000 120,000 30,000 Interest expense (80,000) (80,000) (60,000) Pre-tax income 70,000 40,000 (30,000) Tax (28,000)...
1. Suppose a Canadian dollar buys 0.68 Euro. How many Canadian dollars do you need to buy a Euro? 2. 1pt Suppose the Canadian dollar appreciated by 10%. Now how many Canadian dollars would be needed? 3. 2pt Suppose the Canadian dollar is worth 0.75 USD. Acadia tuition costs $10,000 CAD per year, and American tuition costs $12,000 USD per year. Calculate the real exchange rate. 4. 1pt Use the number derived from 3 to conclude whether or not tuition...
3. Foreign Exchange. You just came back from Canada, where the Canadian dollar was worth $.70 You still have C$200 from your trip and could exchange them for dollars at the airport, but the airport foreign exchange desk will only buy them for $.60. Next week, you will be going to Mexico and will need pesos. The airport foreign exchange desk will sell you pesos for $.10 per peso. You met a tourist at the airport who is from Mexico...
5. Suppose that gasoline in Toronto, Canada, costs 1.25 Canadian dollars per liter, and 1 U.S. dollar trades for 1.32 Canadian dollars. Explain how this information entails two unit-of-measurement problems for a typical U.S. citizen stopping to buy gas in Toronto who wants to know how much the gas “really” costs. (Hint: One of the unit-of-measurement problems involves money, and the other one involves measures of volume.) 6. For each of the following items, say whether it is counted in...
In France one kilogram of macadamia nuts costs 10.5 and $10 Canadian dollars in Canada. According to the Law of One Price, the expected exchange rate between the euro and the Canadian dollar would be Select one: a. $1.67/ b. $0.12/ c. 0.67/$ d' €1.5/S Scenario: Kaleidoscope Kolors, Inc., Kaleidoscope Kolors, Inc., is a San Francisco company that sells clothing all across the U.S. Kaleidoscope has subsidiaries in several nations internationally. At the end of the year Kaleidoscope integrates its...
a. Gold Is $350 per ounce In the United States and 2.800 pesos per ounce In Mexico. The nominal exchange rate between U.S. dollar and Mexican pesos that is Implled by the PPP theory Is: pesos. b. Mexico experiences Inflation so that the price of gold rises to 4,200 pesos per ounce, whlle the price of gold remalns $350 per ounce In the United States. The nominal exchange rate between U.S. dollars and Mexican pesos that is Implied by the...
[Use the information below to compare Switzerland (SWI), India (IND), and the United States (USA) in per capita terms, adjusted for price differences. You are given the following data table. Fill in the missing values. Population (column A) and GDP (D) are in millions. GDP in column D is in domestic currency, the Franc in Switzerland, the Rupee in India, and the U.S. dollar for the United States. The exchange rate (B) is units of foreign currency per U.S. $1,...