Question

2-Williams Corp. is considering signing contracts that will obligate the firm to purchase 100000 Swiss Francs worth of computer equipment at the end of each calendar quarter for the next 2 years. Williams is also signing a contract with a local high school that will purchase this equipment from Williams at a price of $89000 (U.S.) per quarter. What would Williams' profit or loss be over the life of the contract (8 quarters) if the "In US Dollar" exchange rate is $0.76 over the life of the contract?

Place your answer to the nearest dollar without a dollar sign or a comma.

3- Sarah is now in the Singapore airport and has 8000 Singapore dollars in her pocket. Sarah is next going to the Czech Republic and needs Czech Koruna. How many Koruna will she be able to exchange if the "in USD" Singapore Dollar exchange rate is 0.795 and the "in USD" Czech exchange rate is 0.046. Czech Koruna Place your answer in number of Czech Koruna rounded to the nearest Koruna. Do not include a comma in your answer.

Answer 1

Solution:-

(2)

The required dollar figure for profit/loss is calculated as follows:-

Profit (loss)= Revenue in USD - Costs in USD

Revenue USD= 89,000* Number of quarters = 89,000*8= 712,000

Cost USD= 100,000*exchange rate*Number of quarters= 100,000*0.76*8= 608,000

Profit USD= 712,000 - 608,000= 104000

(3)

Exchange value of 8,000 Singapore dollars in terms of USD= 8,000*0.795= $6,360

Exchange value of 6,360 US dollars in terms of Koruna= 6,360/0.046= 138261