Table 30-1 -Refer to Table 30-1

question 98

Essay

Table 30-1
$$\begin{array} { | l | l | l | l | } \hline & & & \\\text { Country } & \text { Big Mac Price } & \text { Implied Exchange Rate } & \text { Actual Exchange Rate } \\\hline \text { Denmark } & 34.59 \mathrm { kroner } & & 6.81 \mathrm { kroner } \text { per dollar } \\\hline \text { Peru } & 10.0 \mathrm { new } \text { sols } & 3.18 \text { new sols per dollar } \\\hline \text { Sweden } & 43.7 \mathrm { kronor } & & 8.52 \mathrm { kronor } \text { per dollar } \\\hline \text { Turkey } & 10.25 \text { lire } & 2.65 \text { lire per dollar } \\\hline\end{array}$$
-Refer to Table 30-1.Fill in the missing values in the above table.Assume the Big Mac is selling for $4.79 in the United States.Explain whether the U.S.dollar is overvalued or undervalued relative to each of the other currencies and predict what will happen in the future to each exchange rate.

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Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing ownership equity spread among individual shareholders.

Working Capital

The difference between a company's current assets and current liabilities, indicating its short-term liquidity.