Question

Suppose your company buys 10,000 pounds of coffee for 3.8 Million Reals today. These 10,000pounds have been marked for sale in Ethiopia in 3 months regardless of market conditions, how much more or less are these pounds of coffee worth to your company in 3 months? For this question, assume that no profit is made from selling at a higher price, i.e. prices in both time periods and in both countries are the same. (ONLY ONE OPTION IS CORRECT)

The value does not change, it is still 10,000 pounds of coffee

It is worth $77,459.33 less

it is worth 3,526,815.24 Birrs less

it is worth 3,526.815.24 Birrs more

It is worth $28,000 less

it is worth $1,000,000 less

it is worth $1,000,000 more

It is worth $28,000 more

it is $77,459.33 more

Answer 1

The company has purchased 10,000 pounds of coffee by paying 3.8 million reals today.

10,000 pounds of coffee has been marked for sale in 3 months in Ethiopia.

No profit is made and the prices in both countries are same in both time periods. Thus, no change in price, quantity and exchange rate(it is not provided).

Out of these only quantity is known hence

The value does not change, it is still 10,000 pounds of coffee.

Note: It is mentioned only one option is correct thus 10,000 pounds remains same.

Please contact if having any query will be obliged to you for your generous support. Your help mean a lot to me, please help. Thank you.