A US based computer manufacture produces and sells laptops in South America thro
ID: 2803922 • Letter: A
Question
A US based computer manufacture produces and sells laptops in South America through two manufacturing facilities: one in Argentina and the other in Brazil. The following applies:
Argentina
Brazil
Investment price
200 million US$
200 million US$
Cost per Laptop
900 pesos
600 reals
Price per Laptop
1200 pesos
800 reals
Projected Annual Earnings
150 million pesos
100 million reals
Exchange Rate
Pesos 3 / US$
Reals 2/US$
Which statement is true?
Argentina has a higher mark-up in USD on laptops than Brazil
Brazil has a cost advantage over Argentina
Argentina has a cost advantage over Brazil
None of above
Argentina
Brazil
Investment price
200 million US$
200 million US$
Cost per Laptop
900 pesos
600 reals
Price per Laptop
1200 pesos
800 reals
Projected Annual Earnings
150 million pesos
100 million reals
Exchange Rate
Pesos 3 / US$
Reals 2/US$
Explanation / Answer
Exchange Rates:
Argentina: $1 = 3 Pesos or say 1 Pesos = 1/3 $
Brazil: $1 = 2 Reals or say 1 Real = 1/2 $
Calculation of sundry elements in USD $
Particular
Argentina
Brazil
Remarks
Working
Amount $
Working
Amount $
Investment Prise
Given in $
200 m
200 m
Same
Cost per Laptop
900*1/3
300
600*1/2
300
Same
Price per Laptop
1200*1/3
400
800*1/2
400
Same
Projects Annual Earning
150m*1/3
50m
100m*1/2
50m
Same
Conclusion: As we can see that bot country’s operation are same in all elements; so we conclude that None of the given statement is true.
Thanks
Particular
Argentina
Brazil
Remarks
Working
Amount $
Working
Amount $
Investment Prise
Given in $
200 m
200 m
Same
Cost per Laptop
900*1/3
300
600*1/2
300
Same
Price per Laptop
1200*1/3
400
800*1/2
400
Same
Projects Annual Earning
150m*1/3
50m
100m*1/2
50m
Same
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.