For this assignment, you will practice calculating exchange rates and examine some of the key factors that have an impact on foreign exchange.

For this assignment, you will practice calculating exchange rates and examine some of the key factors that have an impact on foreign exchange.
MBA 6601, International Business Unit IV Assignment Complete Part1 and Part 2 of this assignment, and submit as a single document for grading. Part 1: Your company is deciding to expand to the following countries, and you and two other managers will have to visit these countries to set up operations. You have $1,500.00 to convert in each currency. Compute the exchange amount for each, and complete the table. Country/Currency USD value for 1 unit of another currency (as of 2/17/16) Exchange amount Japanese yen $0.008754 Ұ Euro $1.1159 € British pound $1.4398 £ While you are visiting each of these countries, you have to buy supplies and equipment for your operations. You want to determine what it is costing you in U.S. dollars. Utilizing the same exchange rates given above, compute the costs into U.S. dollars, and complete the table: Japanese yen Computer Ұ167,000.00 Euro Desks & chairs €1,125.00 British pound Printer £575.00 Part 2: Pedro in Costa Rica wants to purchase some wild Atlantic salmon from Hans in Iceland. The fish are purchased in Iceland’s currency, the krona. Pedro’s brother works in a bank and will take care of the transactions free of charge. Pedro has 1,000,000 colons to start with. (There is no transaction fee, and shipping is not calculated at this point.) How much krona does he have to work with? Answer: Country/Currency USD $ value for 1 unit of another currency (as of 2/17/16) Euro € value for 1 unit of another currency (as of 2/18) Costa Rica colon CRC $0.001909 €0.001745 Iceland krona ISK $0.00788 €0.007062 The next day Hans decides to purchase some bananas from his new trading partner in Costa Rica. Han’s sister works for an import/export agency and can arrange the transaction in euros with no fee. Hans takes all of the krona he received from Pedro and proceeds to convert his currency to colon. (Note, one country’s currency experienced some weakness overnight.) How much colon does he have to work with? List your steps and the results you achieved with each step. Also, explain some factors that could cause the country’s currency to weaken. Answer:
For this assignment, you will practice calculating exchange rates and examine some of the key factors that have an impact on foreign exchange.
MBA 6601, International Business Exchange Rate Examples Rates table Country/Currency USD value for 1 unit of another currency (as of 3/15/16) Euro(€) 1.124897 Japanese yen(¥) .008847 Swiss franc(₣) 1.030061 One -step examples Example 1: Convert $3,000 to euros. Divide the dollar amount by the given euro rate (1.124897). $3,000 ÷ 1.124897 = €2,666.91 Example 2 : Convert $3,000 to yen. Divide the dollar amount by the given yen rate (.008847). $3,000 ÷ .008847 = ¥339,098 Example 3: Convert ₣1,500 to U.S. dollars. Multiply the Swiss franc amount by the given Swiss franc rate (1.030061). ₣1,500 * 1.030061 = $1,545.09 Example 4: Convert €16,000 to U.S. dollars. Multiply the euro amount by the given euro rate (1.124897). €16,000 * 1.124897 = $17,998.35 Multiple -step Examples In some cases, it may take a few steps to calculate the currency since only the most frequently used rates are provided by financial media. An example would be converting euros to yen. (You do not have to use this method to complete your assignment if you are familiar with an alternative method.) Example 5: Convert €3,000 to yen Step 1: Convert euros to dollars, €3,000 * 1.124897 = $3,374.69 Step 2: Convert dollars to yen, $3,374.69 ÷ .008847 = ¥381,4 50.32 Example 6: Convert ¥50,000 to Swiss franc s. Step 1: Convert yen to doll ars, ¥50,000 * .008847 = $442.35 Step 2: Convert dollars to Swiss francs, $442.35 ÷ 1.030061 = ₣429.4 4 Practice Country/Currency USD value for 1 unit of another currency Euro(€) 1.121303 Japanese yen(¥) .008878 British pound (£) 1.428021 Convert $8,000 into the following currencies: 1. Euros – 2. Yen – 3. Pounds – Convert the following into U.S. dollars: 4. €1,000 – 5. ¥60,000 – 6. £400 – Convert the following: 7. €2,000 to pounds 8. ¥70,000 to pounds Note: Solutions are on the following page. Solutions 1. €7,134.56 2. ¥901,103.85 3. £5,602.16 4. $1,121.30 5. $532.68 6. $571.21 7. £1,570.43 8. £435.19