Williams Corp. is considering signing contracts that will obligate the firm to p

Question

Williams Corp. is considering signing contracts that will obligate the firm to purchase 115000 Swiss Francs worth of computer equipment at the end of each calendar quarter for the next 2 years. Williams is also signing a contract with a local high school that will purchase this equipment from Williams at a price of $90000 (U.S.) per quarter. What would Williams' profit or loss be over the life of the contract (8 quarters) if the "In US Dollar" exchange rate is $0.58 over the life of the contract?
$

Place your answer to the nearest dollar without a dollar sign or a comma.

Explanation / Answer

Exchange rate -

Swiss Franc 1 = $0.58

Dollar amount of Purchase price of equipement per quarter = Swiss Francs 115,000 x $0.58 / SwissFranc 1 = $66700

Sale Price per quarter = $90000

Profit per quarter = $90000 - $66700 = $23300

Profit over life of contract (8 quarters) = $23300 x 8 = $186400

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