Q 53Q 53
U.S. dollars are legal currency only in the United States. International investment, travel, and trade require that dollars be exchanged for foreign currency. In today's global economy, a floating exchange rate system is used to value major currencies compared to each other. Because the values of these currencies vary continually, exchange rate tables are published daily by numerous business sources. The information below is taken from one such exchange-rate table.
You are the sales manager of Republic Enterprises, Inc., a company that sells motor parts in many countries. For the next two weeks, you are going on a selling trip to Canada and the United Kingdom. Your airline fare and hotel bill will be charged on company credit cards. Your boss has allotted an additional $2,500 for out-of-pocket expenses during the trip. Use the currency exchange rate table above to perform the following calculations.
a. A few days before your trip, you exchange the $2,500 U.S. dollars for British pounds to be used while you are in London. How many pounds will you have for the British portion of your trip? Round to the nearest pound.
b. When you finish your business in London, you have 800 pounds left. Your next stop is Toronto, Canada. How many Canadian dollars will those British pounds purchase? Round to the nearest Canadian dollar.
c. After completing your business in Canada, you have $375 Canadian dollars left. How many U.S. dollars will those Canadian dollars purchase? Round to the nearest U.S. dollar.
d. Before you left on the trip, you price-checked a particular camera at Best Buy for $358. You then used the Internet to find that the same camera model is available in London for 266 British pounds and in Toronto for $362 Canadian dollars. Where should you buy the camera to get the lowest price-at home or in one of the cities on the trip? Round each figure to the nearest U.S. dollar.