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A box of candy costs 28.80 Swiss francs in Switzerland and $20
in the United States. Assuming that purchasing power parity (PPP)
holds, what is the current exchange rate?
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Question 6
Suppose one year ago, Hein Company had inventory in Britain
valued at 240,000 pounds. The exchange rate for dollars to pounds was
1£ = 2 U.S. dollars. This year the exchange rate is 1£ = 1.82 U.S.
dollars. The inventory in Britain is still valued at 240,000 pounds.
What is the gain or loss in inventory value in U.S. dollars as a result of
the change in exchange rates?
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Question 7