Assume that you are the manager of a U.S. company and you face an exchange rate of ¥120 per $1
Whenever you receive an order, rather than ship from your production facilities, you call in the order to a Japanese company and have the bill shipped to you directly. If the bill shipped to you is ¥7,500 and you can collect $65 per item sold to your customer, what would be your profit per item be if you pay the Japanese company ¥7,500?
A) $1.50 per item
B) $1.60 per item
C) $2.50 per item
D) $2.80 per item
Answer: C
Explanation: C) By paying the Japanese company, you are converting yen into dollars and getting:
= $62.50 per item. Since you collect $65 per item sold to your customer, your profit per item is $65.00 - $62.50 = $2.50. This is a profit of $2.50 per item.
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Carol worked for All Safe Inc an insurance company in Ottawa. When she signed her employment contract it stated if she left All Safe she could not work for another insurance company within the Metropolitan City of Ottawa for 12 months
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