18. Heavy Company sold metal scrap to a Brazilian company for 200,000 Brazilian

Question

18. Heavy Company sold metal scrap to a Brazilian company for 200,000 Brazilian reais on December 1, 20X8, with payment due on January 20, 20X9. The exchange rates were: December 1, 20XX, 1 real = $0.5435 December 31, 20XX, 1 real = $0.5192 January 20, 20XX, 1 real = $0.5305 Based on the preceding information, which of the following is true of dollar's movement vis-à-vis Brazilian real during the period? (Points : 1) December 1 - 31 the Dollar weakened and January 1 - 20 the Dollar strengthened December 1 - 31 the Dollar strengthened and January 1 - 20 the Dollar weakened December 1 - 31 the Dollar weakened and January 1 - 20 the Dollar weakened December 1 - 31 the Dollar strengthened and January 1 - 20 the Dollar strengthened

Explanation / Answer

ON 1 DECEMBER 20XX 1 REAL=$0.5435, (MEANS IF WE HAVE TO PAY $0.5435 TO GET 1 REAL)

ON 31 DECEMBER 20XX 1 REAL=$0.5192 (MEANS IF WE HAVE TO PAY $0.5192 TO GET 1 REAL)

"IT SIMPLY SHOWS THAT DOLLAR VALUE IS DECEREASING AS WE HAVE TO PAY LESS DOLLAR FOR 1 REAL"

ON 31 DECEMBER 20XX 1 REAL=$0.5192 (MEANS IF WE HAVE TO PAY $0.5192 TO GET 1 REAL)

ON 20 JANUARY 20XX 1 REAL=$0.5305 (MEANS IF WE HAVE TO PAY $0.5305 TO GET 1 REAL)

"IT SIMPLY SHOWS THAT DOLLAR VALUE IS INCREASEING AS WE HAVE TO PAY MORE DOLLAR FOR 1 REAL"

SO DECEMBER 1- 31 DOLLAR WEAKENED AND JANUARY 1- 20 DOLLAR STRENGTHENED.

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.