A case study in the chapter analyzed purchasing-power parity for several countries using the price of Big Macs. Here are data fo
1 answer:
Answer:
Predicted exchange rate = Country price of Big Mac/ US price of Big Mac
Predicted exchange rate:
Chile = 2,050 / 4.37
= 469.11 Pesos / US dollar
Hungary = 830 / 4.37
= 189.93 Forints / USD
Czech Republic = 70 / 4.37
= 16.01 Korunas / USD
Brazil = 11.25 / 4.37
= 2.57 Real/ USD
Canada = 5.41 / 4.37
= 1.24C$/ US$
<em>According to purchasing power parity, the predicted exchange rate between the Hungarian forint and the Canadian dollar is </em><em><u>153.42 Forint per C$</u></em><em>. However, the actual exchange rate is </em><em><u>217 Forint per Canadian Dollar</u></em><em>. </em>
Predicted exchange rate = 830 / 5.41 = 153.42 Forint per C$
Actual Exchange rate = 217/1 = 217 Forint per C$
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My answer is: Produce Product C first, then followed by Product A. to maximize contribution margin. Product B will not be produced since the maximum number of pounds has already been used in producing Products C and A.
<span> <span> </span><span><span> PER UNIT
</span> <span> PRODUCT A B C
</span> <span> SELLING PRICE 80 62 81
</span> <span> VARIABLE EXPENSES
</span> <span> DIRECT MATERIALS 24 18 9
</span> <span> OTHER VAR EXP. 24 25.4 43.65
</span> <span> TOTAL VAR EXP 48 43.4 52.65
</span> <span> CONTRIBUTION MARGIN 32 18.6 28.35
</span> <span> <span>CM RATIO </span> 0.4 0.3 0.35
</span> <span> </span> <span>
COMPANY CAN SELL 800 UNITS OF EACH PRODUCT PER MONTH.
</span> <span> SAME RAW MATERIAL IS USED IN EACH PRODUCT.
</span> <span> MATERIAL COSTS 3 PER POUND W/ A MAX OF 5,000 POUNDS EACH MONTH
</span> <span> </span> <span>
PRODUCT DM <span>UNIT COST </span> NO. OF LBS
</span> <span> A 24 3 8
</span> <span> B 18 3 6
</span> <span> C 9 3 3
</span> <span> </span> <span> PRODUCT NO. OF LBS/UNIT MAX UNITS TOTAL NO. OF LBS
</span> <span> A 8 800 6400
</span> <span> B 6 800 4800
</span> <span> C 3 800 2400
</span> <span> TOTAL 13600
</span> <span> LIMITATION: 5,000 POUNDS PER MONTH ONLY.
</span></span></span><span> <span> </span><span><span> <span>required: </span>
</span> <span> <span>1. calculate the contribution margin per pound of the constraining resource for each product. </span>
</span> <span> 2. which orders would you advise the company to accept first, those for a, b, or c? which orders second? third?
</span> <span> </span> <span>
</span></span></span><span>PLS. SEE ATTACHMENTS FOR MY FULL COMPUTATIONS. </span>
<span> <span> </span><span><span> PER UNIT
</span> <span> PRODUCT A B C
</span> <span> SELLING PRICE 80 62 81
</span> <span> VARIABLE EXPENSES
</span> <span> DIRECT MATERIALS 24 18 9
</span> <span> OTHER VAR EXP. 24 25.4 43.65
</span> <span> TOTAL VAR EXP 48 43.4 52.65
</span> <span> CONTRIBUTION MARGIN 32 18.6 28.35
</span> <span> <span>CM RATIO </span> 0.4 0.3 0.35
</span> <span> </span> <span>
COMPANY CAN SELL 800 UNITS OF EACH PRODUCT PER MONTH.
</span> <span> SAME RAW MATERIAL IS USED IN EACH PRODUCT.
</span> <span> MATERIAL COSTS 3 PER POUND W/ A MAX OF 5,000 POUNDS EACH MONTH
</span> <span> </span> <span>
PRODUCT DM <span>UNIT COST </span> NO. OF LBS
</span> <span> A 24 3 8
</span> <span> B 18 3 6
</span> <span> C 9 3 3
</span> <span> </span> <span> PRODUCT NO. OF LBS/UNIT MAX UNITS TOTAL NO. OF LBS
</span> <span> A 8 800 6400
</span> <span> B 6 800 4800
</span> <span> C 3 800 2400
</span> <span> TOTAL 13600
</span> <span> LIMITATION: 5,000 POUNDS PER MONTH ONLY.
</span></span></span><span> <span> </span><span><span> <span>required: </span>
</span> <span> <span>1. calculate the contribution margin per pound of the constraining resource for each product. </span>
</span> <span> 2. which orders would you advise the company to accept first, those for a, b, or c? which orders second? third?
</span> <span> </span> <span>
</span></span></span><span>PLS. SEE ATTACHMENTS FOR MY FULL COMPUTATIONS. </span>
Answer:
$800.71
Explanation:
In this question we use the PMT formula that is shown on the attachment below:
Data provided in the question
Present value = $38,000
Future value = $0
Rate of interest = 10% ÷ 12 months = 0.83333%
NPER = 60 months
The formula is shown below:
= PMT(Rate;NPER;-PV;FV;type)
The present value come in negative
So, after solving this, the monthly payments is $800.71
