If the Exchange Rate Between the Dollar and the Euro

question 61

Multiple Choice

If the exchange rate between the dollar and the euro is equal to €0.8 per $1.00, then what is the U.S. dollar cost of a German-made Porsche costing €45,000?

• A)$36,000
• B)$39,000
• C)$45,000
• D)$56,250
• E)None of these

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Definitions:

Voting Stock

Shares that give the holder the right to vote on company matters, such as electing the board of directors.

Contingent Payment

A payment that is not guaranteed but depends on the occurrence of a certain event or condition in the future.

Cash Flows

The complete sum of funds moving into and out of an enterprise, predominantly affecting its ability to cover short-term obligations.