Question

In: Finance

A pair of shoes cost 80 euros in France. The same pair of shoes cost $100...

  1. A pair of shoes cost 80 euros in France. The same pair of shoes cost $100 in the U.S.
    1. Assuming you would like to pay less, where would you buy the shoes?
    2. Suppose instead the exchange rate is $1.3 per euro. What is the $ price of shoes in France?
    3. Assuming you would like to pay less, where would you buy the shoes?

Solutions

Expert Solution

a)

The current Exchange rate is $1 = Euros 0.9

Given the cost of shoes in France = 80 Euros

The cost of Shoes in U.S. = $100 = 100 * 0.9 = Euros 90

At current exchange rate a pair of shoes cost less in France.

b)

Given the Exchange rate is Euro 1 = $ 1.3

Given the cost of shoes in France = 80 Euros

The dollar cost of shoes in France = 80 * 1.3 = $ 1.04

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Company PVFV sells shoes at an average price of $100. The cost to produce each pair...
Company PVFV sells shoes at an average price of $100. The cost to produce each pair of shoes is $40. The company has annual fixed costs of $40,000. Four questions: What is the breakeven in terms of unit sales? Show calculations using 2 different methods. Include a written description of how the two methods approach the problem. What is the breakeven in terms of sales revenue?
A computer costs $430 in the United States. The same model costs 770 euros in France....
A computer costs $430 in the United States. The same model costs 770 euros in France. If purchasing power parity holds, what is the spot exchange rate between the euro and the dollar? Do not round intermediate calculations. Round your answer to two decimal places. $1 =______ euros
Suppose that France and Germany both produce rye and shoes. France's opportunity cost of producing a...
Suppose that France and Germany both produce rye and shoes. France's opportunity cost of producing a pair of shoes is 4 bushels of rye while Germany's opportunity cost of producing a pair of shoes is 10 bushels of rye. By comparing the opportunity cost of producing shoes in the two countries, you can tell that (France, Germany) has a comparative advantage in the production of shoes and (France, Germany)  has a comparative advantage in the production of rye. Suppose that France...
. Marathon, Inc. makes and sells dancing shoes. The variable cost per pair to produce is...
. Marathon, Inc. makes and sells dancing shoes. The variable cost per pair to produce is $10 and the selling price is $25 per pair. They currently have 500 pair in inventory from a prior period, valued per GAAP at $15 per pair. If Marathon, Inc. makes 1,000 pairs of dancing shoes and sells 1,500 pairs, what will be the difference in net income between absorption costing and variable costing? A. Net income under variable costing will be $2,500 more...
1. Andrew Clark's shoe company has the following information: Selling price per pair of shoes: $100...
1. Andrew Clark's shoe company has the following information: Selling price per pair of shoes: $100 Direct materials per pair of shoes: $30 Direct labor per pair of shoes: $20 Variable Selling expense per pair of shoes: $5 Variable overhead per pair of shoes: $10 Fixed overhead per month: $10,000 Fixed Selling expenses per month: $20,000 I n January, 2,000 pairs of shoes were produced and 1,800 pairs of shoes were sold. Using variable contribution margin costing, what is the...
Aldo's Shoes bought a shipment of 756 pairs of​ women's shoes for ​$48 per pair. The...
Aldo's Shoes bought a shipment of 756 pairs of​ women's shoes for ​$48 per pair. The store sold 107 pairs at the regular selling price of $159 per​ pair, 69 pairs at a clearance sale at a discount of 44% and the remaining pairs during an inventory sale at a price that equals cost plus overhead. The​ store's overhead is 15% of the cost. ​(a) What was the price at which the shoes were sold during the clearance​ sale? ​(b)...
Barcelona, Tbk. produce international quality soccer shoes. The price of a pair of soccer shoes is...
Barcelona, Tbk. produce international quality soccer shoes. The price of a pair of soccer shoes is Rp. 250,000.00. The variable cost to produce soccer shoes is Rp. 150,000.00 and a fixed cost of Rp. 500,000,000. a. It is assumed the company currently sells 6,000 pairs of soccer shoes per year, calculating operating leverage. b. Based on problem (b) it is assumed the company has a total financial cost of Rp. 20,000,000, consisting of 40% interest expense and the remaining preferred...
Exchange rate movement Suppose a basket of goods in Paris cost 133 euros and the same...
Exchange rate movement Suppose a basket of goods in Paris cost 133 euros and the same basket purchased in New York cost $153. A. At what exchange rate between euros and dollars is the cost of the basket of goods the same in each City? B. Now suppose that over the next year inflation in France is expected to be 2% while in the US the forecast is for 6% inflation. What exchange rate do you expect a year from today?  
A researcher claims that the average cost of men’s athletic shoes is less than $80. He...
A researcher claims that the average cost of men’s athletic shoes is less than $80. He selects a random sample of 36 pairs of shoes from a catalog and finds that the average cost is $75. Is there enough evidence to support the researcher’s claim at Alpha = 0.10 . Assume the population standard deviation is 19.2. Define Step 1 Step 2 Step 3 Step 4 Step 5
A researcher claims that the average cost of men’s athletic shoes is less than $80. He...
A researcher claims that the average cost of men’s athletic shoes is less than $80. He selects a random sample of 36 pairs of shoes from a catalog and finds that the average cost is $75. Is there enough evidence to support the researcher’s claim at Alpha = 0.10 . Assume the population standard deviation is 19.2. Define Step 1 Step 2 Step 3 Step 4 Step 5
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT