Question

In: Finance

You want to buy industrial ethanol and you have $125USD to spend. The domestic price is...

You want to buy industrial ethanol and you have $125USD to spend. The domestic price is $0.7USD per liter. You can also buy ethanol with free shipping from Canada and Mexico. The price in Canada is $0.5CD and the price in Mexico is 10 pesos per liter. The spot US-CA exchange rate is $0.85 USD and the CA-MX exchange rate is 16₱. From what country should you buy your ethanol and how much can you afford to buy?

Solutions

Expert Solution

USD to Canda 0.85
Mexican Peso to Canadian dollar 16
Cross rate for USD to Mexican Peso 0.85/16
Cross rate for USD to Mexican Peso 0.053125
US Canada Mexico
Available funds in domestic currency             125.00 125/0.85 125/0.053125
Available funds in domestic currency             125.00                147.06           2,352.94
Domestic price per litre                 0.70                    0.50                10.00
Litres purchased (Available funds/Domestic price)             178.57                294.12              235.29
As we can see the Canadain market is most suited where the firm will be able to buy the most 294.12 litre.

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

You have received $100 from your parents to spend, but they want you to spend equal...
You have received $100 from your parents to spend, but they want you to spend equal amounts of it (labeled X) at the start of the next month (time period or t1) and at the start of the second month (t2). How much money can you spend each time (X)? Assume a monthly interest rate of 10%. HINT:- Use the compound interest formulae to spell out the relation between X occurring at t1 and t2 and some P1 and some...
You want to buy a car that has a price of $30,000. You will trade in...
You want to buy a car that has a price of $30,000. You will trade in a vehicle that has payments of $215.84 per month. You have 2.5 years left at an APR of 6%. They will give you $7000 in trade in. If you trade in and finance the car for 5 years @ 7% APR, what will your payment be?
You want to buy a condo and you want to comparison shop. You have 3 different...
You want to buy a condo and you want to comparison shop. You have 3 different options where the rates and years go together and 3 different condos. You will put down 15% as a down payment for each and borrow the rest from a bank. Please tell me the monthly payment and the total cost for each option. Option 1 Option 2 Option 3 Years 15 20 30 Rates .035 .045 .055 Condos costs: A B C 450,000 350,000...
You want to buy a house. You have found the house you like and have agreed...
You want to buy a house. You have found the house you like and have agreed to purchase the house for $300,000. You go to the bank to get a loan and have decided that a 30 year mortgage loan is the best loan duration. What do you think the interst rate will be on your loan given the following data? "Real" interest rate given current macro econmomic conditions = 2.0% The inflation rate forecasted for the future is =...
You want to buy an American Put on Apple (AAPL) with a strike price of $280....
You want to buy an American Put on Apple (AAPL) with a strike price of $280. Apple is currently trading for $282.12, has a u of 1.14, and a d of 0.88. The risk free rate is 1% per period. Use a two period binomial model. What is the most you should pay for that put?
You want to buy an American Put on Apple (AAPL) with a strike price of $290....
You want to buy an American Put on Apple (AAPL) with a strike price of $290. Apple is currently trading for $282.12, has a u of 1.15, and a d of 0.87. The risk free rate is 1% per period. Use a two period binomial model. What is the most you should pay for that put? Note: Answer in dollars per share, round to the nearest penny.  
you have $100 to spend on food and clothing. the price of food is $4, and...
you have $100 to spend on food and clothing. the price of food is $4, and the price of clothing is $10. A. graph your budget constraint B. suppose the government subsidizes clothing such that each unit of clothing is half price, up yo the first five units of clothing. Graph your budget constraint in this circumstance.
You want to buy a car for cash 5 years from now. The car price at...
You want to buy a car for cash 5 years from now. The car price at that time will be 20000 dollars. To this end you want to make an annuity deposit each year so that you accumulate the required amount. Interest rate is 6%. How much do you have to deposit each year if (i) deposits are made at the end of each year (ii) deposits are made at the beginning of each year.
You want to buy a car for cash 5 years from now. The car price at...
You want to buy a car for cash 5 years from now. The car price at that time will be 20000 dollars. To this end you want to make an annuity deposit each year so that you accumulate the required amount. Interest rate is 6%.  How much do you have to deposit each year if (i) deposits are made at the end of each year (ii) deposits are made at the beginning of each year.
You want to buy a house that costs $210,000. You have $21,000 for a down payment,...
You want to buy a house that costs $210,000. You have $21,000 for a down payment, but your credit is such that mortgage companies will not lend you the required $189,000. However, the realtor persuades the seller to take a $189,000 mortgage (called a seller take-back mortgage) at a rate of 5%, provided the loan is paid off in full in 3 years. You expect to inherit $210,000 in 3 years, but right now all you have is $21,000, and...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT