Exercise_session_3.xlsx - Problem 3.12 Middle East Exports...

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Problem 3.12 Middle East ExportsU.S dollar equivalent of final price paid$ 830,001.69Oriol Díez Miguel S.R.L., a manufacturer of heavy duty machine tools near Barcelona, ships an order to a buyer in Jordan. The purchase price is 425,000. Jordan imposes a 13% import duty on all products purchased from the European Union. The Jordanian importer then re-exports the product to a Saudi Arabian importer, but only after imposing their own resale fee of 28%. Given the following spot exchange rates on Currency Crossrate Spot RateJD 0.96/€Jordanian dinar (JD) per U.S. dollar ($)JD 0.711/$Saudi Arabian riyal (SRI) per U.S. dollar ($)SRI 3.751/$AssumptionsValuesPurchase price , in Euro (£)£425,000Spot rate of exchange, Jordanian dinar per euro (JD/£)0.9600 Spot rate of exchange, Jordanian dinar per dollar (JD/$)0.7110 Spot rate of exchange rate, saudi Arabian riyal per Jordanian Dinar (SRI/JD)5.2751Jordanian import duty on EU products13%Jordanian resale fees28%Spot rate of exchange rate, saudi Arabian riyal per dollar (SRI/$)3.751what is the dollar price after all exchanges and fees ?purchase price, converted to Jordaniane dinar (JD)408,000.00Additional fees due on importation 53,040.00Total cost, Jordanian dinar (JD)461,040.00Resale fee in Jordan129,091.20Resale price to saudi Arabian, in JD590,131.203,113,004.33( spot rate (SRI/JD) x Resale price to saudi Arabian (JD) )

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