Question

You are selling an autographed Steve Nash rookie basketball card online for $170. A potential buyer contacts you and offers to pay you$170 Canadian dollars. You quickly check and find the exchange rateis $1 U.S. to $1.25 Canadian. If you take this deal, you will have returned Steve to his homeland and:
A. Earned more than if you accept $170 U.S.
B. Come out financially equal
C. Earned less than if you accept $170 U.S

Answer 1

Answer:

Option (C) is correct.

Explanation:

Selling price of a basketball = $170

A potential buyer contacts you and offers to pay you$170 Canadian dollars.

Exchange rate between the U.S and Canada is as follows:

$1 U.S = $1.25 Canadian

So,

Worth of $170 U.S in terms of Canadian dollar is as follows:

= $1.25 × $170

= $212.5 Canadian dollars

If you take this deal, you will have returned Steve to his homeland and Earned less than if you accept $170 U.S.

Because, the worth of $170 U.S dollars is $212.5 Canadian dollars. Hence, there is a loss of $42.5 Canadian dollars if he will accept the deal.

So, it is better for him to accept $170 U.S dollars.