482 Chapter 11 International Business
c. Mexican pesos
d. Philippine pesos
e. Uruguayan pesos- A sign in a Buffalo tavern states “C$1 U.S.$0.85” If an order of volcanic chicken wings costs $6.75, what would the
cost be if you paid in Canadian dollars? - The photo below shows the rates offered by an exchange bureau located in Canada. The rates shown are offers to buy
and sell U.S. dollars and European euros. (The French word achat means “buy” and vente means “sell.”)
a. How much, in Canadian dollars, would you get if you exchanged US$750 at this bureau?
b. How much, in U.S. dollars, would you get if you exchanged C$400 at this bureau.
c. Suppose that this exchange bureau converts 1,000 euros into Canadian dollars. Two hours later, another customer
comes in and buys 1,000 euros with Canadian currency. Calculate the bureau’s profi t (in Canadian dollars) from
this pair of transactions.- An engineering fi rm in Bangalore, India, bills an American company 325,700 rupees for consulting services. What is
the cost in U.S. dollars? - In a Vancouver newspaper ad, a tour operator in Hobart, Tasmania (Australia) offers to accept “Canadian currency at
par.” Is this a good deal or not? Explain.
G. Additional Exercises
- Prices in U.S. dollars are commonly carried out to two decimal places, because each dollar is divisible into 100 cents.
Can you think of any place where prices in U.S. dollars are normally carried out to more than two decimal places? - In this chapter, we noted that like U.S. dollars, most currencies have a main unit that can be divided into 100 smaller
units, such as our “dollars” and “cents”. We also noted that the value of the main unit of some currencies is small
enough that you would be unlikely to ever worry about smaller units.
Are there any currencies in use in the world today that have a main unit that can be divided into more than 100
smaller units? For example, are there any currencies that are divided into 1,000 units (requiring three decimal places)?
Research this question, using library and/or Internet resources.