Answer:
$80,000
Explanation:
Given that at the end of each quarter, William corporation will purchase 100,000 Swiss francs worth of computer equipment for next 2 years. A local high school will still purchase this computer equipment at $89,000 each quarter for the next 2 years.
This means, we have the following:
Cost of purchase = 100,000 * number of quaters = 100,000 * 8 = 800,000
Convert to USD at an exchange rate of $0.79 = 800,000 * 0.79 = $632,000
Cost of purchase in USD = $632,000
Also, find the revenue generated after selling the computer equipments to the high school.
Revenue generated = $89,000 * number of quaters = $89,000 * 8 = $712,000
Williams' profit or loss would be calculated using the following:
Profit(loss) = Revenue generated - Cost of purchase
= $712,000 - $632,000
= $80,000
Since we have a positive value, Williams would make a profit of $80,000 through out the life of the contract.
