Jan 11 Foreign Exchange Study Problems - answers

# Jan 11 Foreign Exchange Study Problems - answers - Foreign...

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Foreign Exchange Study Problems (Page 801, (22-1B - 22-5B)) Question 22-1B. ( Converting currencies ) An American business needs to pay (a) 15,000 Canadian dollars, (b) 1.5 million yen, and (c) 55,000 Swiss francs to businesses abroad. What are the dollar payments to the respective countries? (a) x U.S. dollars = 15,000.00 Canadian dollars * 0.8439 U.S. dollar / Canadian dollar x U.S. dollars = 12,658.50 U.S. dollars x = 12,658.50 Payment of \$12,658.50 is equal to 15,000 Canadian dollars. (b) x U.S. dollars = 1,500,000.00 yen * 0.004680 U.S. dollar / yen x U.S. dollars = 7,020.00 U.S. dollars x = 7,020.00 Payment of \$7,020.00 is equal to 1,500,000.00 yen. (c) x U.S. dollars = 55,000.00 Swiss francs * 0.5140 U.S. dollar / Swiss franc x U.S. dollars = 28,270.00 U.S. dollars x = 28,270.00 Payment of \$28,270.00 is equal to 55,000.00 Swiss francs.

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Question 22-2B. ( Converting currencies ) An American business pays \$20,000, \$5,000, and \$15,000 to suppliers in respectively, Japan, Switzerland, and Canada. How much, in local currencies, do the suppliers receive? Japan \$20,000 U.S. dollars = x yen * 0.004680 U.S. dollar / yen x yen = \$20,000 U.S. dollars / (0.004680 U.S. dollar / yen) x yen = 4,273,504.27 yen x = 4,273,504.27 The Japanese supplier will receive 4,273,504.27 yen Switzerland \$5,000 U.S. dollars = x Swiss franc * 0.5140 U.S. dollar / Swiss franc x Swiss franc = \$5,000 U.S. dollars / (0.5140 U.S. dollar / Swiss franc) x Swiss franc = 9,727.63 Swiss franc x = 9,727.63 The Swiss supplier will receive 9,727.63 Swiss francs

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## This note was uploaded on 08/21/2010 for the course FIN FIN370 taught by Professor Mr.garcia during the Fall '09 term at DeVry Long Beach.

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Jan 11 Foreign Exchange Study Problems - answers - Foreign...

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