Question

You want to buy industrial ethanol and you have $125USD to spend. The domestic price is $0.7USD per liter. You can also buy ethanol with free shipping from Canada and Mexico. The price in Canada is $0.5CD and the price in Mexico is 10 pesos per liter. The spot US-CA exchange rate is $0.85 USD and the CA-MX exchange rate is 16₱. From what country should you buy your ethanol and how much can you afford to buy?

Answer 1

Canada.

Step-by-step explanation:

The exchange rates is given below;

=> Mexican Peso to Canadian dollar = 16.

=> USD to Canda = 0.85.

=> The Cross rate for USD to Mexican Peso = 0.053125.

=> Cross rate for USD to Mexican Peso = 0.85/16.

In the United States of America Available funds in domestic currency =

125.00, 125.00.

In the United States of America the Domestic price per litre = 0.7.

US Litres purchased = 178.57.

For Canada and Mexico, the Available funds in domestic currency,

125/0.85; 147.06(Canada)

125/0.053125; 2,352.94 (Mexico).

For Canada and Mexico, the Domestic price per litre;

0.50(Canada) 10.00(Mexico).

Litres purchased for Canada and Mexico;

294.12(Canada) 235.29(Mexico).