Question

You are an international shrimp trader. A food producer in the Czech Republic offers to pay you 2.3 million Czech koruna today in exchange for a​ year's supply of frozen shrimp. Your Thai supplier will provide you with the same supply for 2.8 million Thai baht today. If the current competitive market exchange rates are 25.49 koruna per dollar and 39.31 baht per​ dollar, what is the value of this​ deal?

Answer 1

$19,002.77

Step-by-step explanation:

The computation of the value of deal is shown below:

The value of the deal = Sales revenue - purchase cost

where,

Sales revenue is

= 2,300,000 ÷ 25.49 koruna per dollar

= $90,231.46

And, the purchase cost is

= 2,800,000 ÷ 39.31 baht per​ dollar

= $71,228.69

So, the value of the deal is

= $90,231.46 - $71,228.69

= $19,002.77

hence, the value of the deal is $19,002.77