Chapter Review Problems
Unit 15.1 Monetary exchange rates: Significance in international business
1. A worldwide currency has existed since October 18, 1878. (T or F) False; a worldwide currency has never existed.
For Problems 2–4, use the exchange rates of Illustration 15-1 to find the equivalent amount, in the foreign currency, of 2,300 U.S.
dollars. Use 2 decimal places in your answer.
2. Euros
3. British pounds
4. Japanese yen
$2,300 = (2,300 .79983) euros = 1,839.61 euros
$2,300 = (2,300 .53251) pounds = 1,224.77 pounds
$2,300 = (2,300 108.890) yen = 250,447 yen
For Problems 5–7, use the exchange rates of Illustration 15-1 to calculate the equivalent amount, in U.S. dollars.
( )
975,000 British pounds = (975,000
.53251 ) U.S. dollars = $1,830,951.53
65
65 Swiss francs = (1.25867
) U.S. dollars = $51.64
21,300 U.S. dollars = $15,907.87
5. 21,300 Canadian dollars 21,300 Canadian dollars = 1.33896
6. 975,000 British pounds
7. 65 Swiss francs
8. A U.S. company negotiates the sale of a $128,000 tractor to a Swiss firm. Using an exchange rate of 1 U.S. dollar =
1.5247 Swiss francs, calculate the price in Swiss francs.
$128,000 = (128,000 1.5247) francs = 195,161.60 francs
9. Sixty days later, the U.S. company receives a check for the amount determined in Problem 8. On the basis of a current
exchange rate of 1.3822, what amount, in U.S. dollars, will the U.S. firm receive from its bank?
(
)
195,161.60 Swiss francs = 195,161.60
1.3822 U.S. dollars = $141,196.35
10. Refer to Problem 9. What if the current exchange rate is 1.6744?
(
)
195,161.60 Swiss francs = 195,161.60
1.6744 U.S. dollars = $116,556.14
11. The simplest way to avoid the risk associated with fluctuating exchange rates is to insist that payment be made in your
country’s currency. (T or F) True
12. International payments are always made by either personal or company check. (T or F) False
13. A U.S. real estate investment company buys an office building in Montreal for 5,300,000 Canadian dollars. Using an
exchange rate of 1 U.S. dollar = 1.4763 Canadian dollars, calculate how much money, in U.S. dollars, is needed to buy
the building.
(
)
5,300,000 Canadian dollars = 5,300,000
1.4763 U.S. dollars = $3,590,056.22
14. Refer to Problem 13. Three years later, the U.S. firm sells the building for 5,500,000 Canadian dollars. The exchange
rate has changed to 1.6855. How much money, in U.S. dollars, will the U.S. firm receive?
(
)
5,500,000 Canadian dollars = 5,500,000
1.6855 U.S. dollars = $3,263,126.67
15. Refer to Problems 13 and 14. How much money, in U.S. dollars, did the U.S. firm make or lose on the investment?
Sold for
Purchased for
Loss
$3,263,126.67
-3,590,056.22
($ 326,929.55)
Unit 15.2 Metric system: Significance in international business
16. Very few countries use the metric system (T or F) False
For Problems 17–20, pick the best choice. Try to estimate using Illustration 15-2.
17. A grapefruit weighs about (a) 2 cg or (b) 200 g.
200 g; a raisin weighs about 1 g
18. A professional basketball player is how tall? (a) 2 m or (b) 2 km.
2 m; a meter is a bit more than a yard
19. The distance between Los Angeles and San Francisco is (a) 650 m or (b) 650 km.
20. An auto gas tank holds about how much gas? (a) 65 or (b) 65 m
350
Chapter 15 International Business: Exchange Rates and Metrics
650 km
65 ; a liter is a bit more than a quart
For Problems 21–23, write the value using standard metric abbreviations.
21. 112 kilometers
112 km
↑
Abbreviation for prefix (kilo)
22. 25 milligrams
↑
Abbreviation for base unit (meter)
25 mg
↑
Abbreviation for prefix (milli)
23. 82 liters
82
There is no prefix
↑
Abbreviation for base unit (gram)
↑
Abbreviation for base unit (liter)
For Problems 24–26, indicate which measurement is larger.
24. mm or cm
1 of a meter; cm is the abbreviation for centimeter and
cm. mm is the abbreviation for millimeter and means 1,000
1
means 100 of a meter.
25. km or m
km. km is the abbreviation for kilometer and means 1,000 meters; m has no prefix and simply means 1 meter.
26. cg or kg
1 of a gram; kg means 1,000 grams.
kg. cg is the abbreviation for centigram and means 100
For Problems 27–29, make the conversion.
27. 850 mm = _______cm
Start at milli on the line indicator of Illustration 15-3. Move to centi (1 place to the left). Move the decimal point
1 place to the left:
850 mm = 850 mm = 85 cm
28. 12 hg = _______cg
Start at hecto on the line indicator. Move to centi (4 places to the right). Move the decimal point 4 places to the
right:
12 hg = 12.0000 hg = 120,000 cg
29. 1,300 m = _______
Start at milli on the line indicator. Move to base unit (3 places to the left). Move the decimal point 3 places to the
left:
1,300 m = 1,300 m = 1.3
For Problems 30–35, use the approximate equivalents of Illustration 15-4 to convert the measurement. Use 2 decimal places in your
answer.
30. 24 kg = _______lb
We will convert from kg to lb (see left side of the Weight section of Ill. 15-4): 24 kg ≈ (24 2.2046) lb ≈ 52.91 lb
31. 100 m =_______yd
We will convert from m to yd (see left side of the Distance section): 100 m ≈ (100 1.09361) yd ≈ 109.36 yd
32. 62 = _______gal (liquid)
We will convert from to gal (see left side of the Volume section): 62 ≈ (62 .26417762) gal ≈ 16.38 gal
33. 17.5 in. = _______cm
We will convert from in. to cm (see right side of Distance section): 17.5 in. ≈ (17.5 2.54) cm ≈ 44.45 cm
34. 38 yd3 = _______m3
We will convert from yd3 to m3 (see right side of Volume section): 38 yd3 ≈ (38 .76456) m3 ≈ 29.05 m3
Chapter Review Problems
351
35. 14.2 oz = _______ g
We will convert from oz to g (see right side of Weight section): 14.2 oz ≈ (14.2 28.3495) g ≈ 402.56 g
36. Standard-sized copy paper is 8.5 in. 11 in. What are the metric dimensions? Use 2 decimal places for each dimension.
Illustration 15-4 gives the choice of converting from in. to (a) cm or (b) m. Converting to meters will result in a
value less than 1; it will be much more meaningful to convert to centimeters:
8.5 in. ≈ (8.5 2.54) cm ≈ 21.59 cm
11 in. ≈ (11 2.54) cm ≈ 27.94 cm
37. A company sells pancake mix in 60-oz packages. What is the metric equivalent (to the nearest gram)?
60 oz ≈ (60 28.3495) g ≈ 1,701 g
38. The high temperature in Chicago was 95°F. The high temperature in Rome on the same day was 38°C. Which city was
warmer?
To compare the temperatures, we must state both using the same scale. Let’s convert the Fahrenheit temperature
(95°) to a Celsius (C) temperature
C = _95 (F - 32) = _95 (95 - 32) = _95 (63) = 35°C
The temperature in Rome (38°C) was higher than that of Chicago (35°C).
39. A normal body temperature is 98.6°F. What is the equivalent Celsius temperature?
C = _95 (F - 32) = _95 (98.6 - 32) = _95 (66.6) = 37°C
40. On a certain winter day in Alaska, the temperature was minus 60°F (-60°F). What is the equivalent Celsius temperature
(to the nearest tenth of a degree)?
C = 59 (F - 32) = 59 (-60 - 32) = 59 (-92) ≈ -51.1°C
Challenge problems
For Problems 41–43, consider an international transaction.
41. A U.S. firm needs 15 U.S. tons (T) of a certain mineral. How many metric tons (t) does it need? Express your answer
with 3 decimal places.
15 T ≈ (15 .9072) t ≈ 13.608 t
42. The seller quotes a price of 975 British pounds per metric ton. Using an exchange rate of 1 U.S. dollar = .62570 British
pounds, determine the equivalent U.S. price per metric ton.
(
)
975 U.S. dollars = $1,558.25
975 British pounds = .62570
43. What is the total price of the order, in U.S. dollars?
13.608 (t) $1,558.25 (per t) = $21,204.67
44. A plumber used the following lengths of pipe: 1.6 m, 2.5 m, 83 cm, and 4.7 m. How many total meters of pipe were
used?
83 cm = .83 m
1.6 m + 2.5 m + .83 m + 4.7 m = 9.63 m
45. While driving to Montreal, Canada, you see a sign that reads “Montreal 483 km.” If you generally drive an average of 50
miles per hour, how many hours will it take to get to Montreal?
483 km ≈ (483 .62137) mi ≈ 300 mi
300 mi ÷ 50 mph = 6 hr
46. After arriving in Canada on a vacation, you pull into a gas station. You notice that the price of gas is 85 cents (Canadian)
per liter. Based on an exchange rate of 1 U.S. dollar = 1.45 Canadian dollars, calculate your cost, in U.S. dollars, per U.S.
gallon. Note: Use chain calculations, without rounding until the final answer is obtained.
( )
.85 U.S. dollars = $0.586206897
Cost in U.S. dollars for one liter: 0.85 Canadian dollars = 1.45
1 liter ≈ (1 .26417762) gal ≈ .26417762 gal
Price per gallon means price ÷ gallons: $0.586206897
.26417762 gal ≈ $2.22 per gallon
352
Chapter 15 International Business: Exchange Rates and Metrics
47. The Washington High School track record for the 100-meter dash is 10.94 seconds. The Lincoln High School record for
the 100-yard dash is 10.03 seconds. Which recordholder ran the fastest?
Let’s determine how many meters per second for each record. Meters per second means the number of meters
divided by the number of seconds.
Washington High School
100 m
10.94 sec. ≈ 9.14 m per sec. For each second, the runner traveled 9.14 m.
Lincoln High School
100 yd ≈ (100 .9144) m ≈ 91.44 m
91.44 m
10.03 sec. ≈ 9.12 m per sec. For each second, the runner traveled 9.12 m.
The Washington High School recordholder ran the fastest.
Practice Test
1. A U.S. company sells a $38,000 product to a Mexican firm. Calculate the price, in Mexican pesos, based on an exchange
rate of 1 U.S. dollar = 10.2350 pesos.
$38,000 = (38,000 10.2350) pesos = 388,930 pesos
2. Eight years ago, a U.S. company purchased an office building in London for 6,800,000 British pounds, based on an
exchange rate of 1 U.S. dollar = .65320 pounds. They just sold the building for 7,500,000 British pounds, based on an
exchange rate of 1 U.S. dollar = .71450 pounds. How much money, in U.S. dollars, did they make or lose on the deal?
(
)
Sold for: 7,500,000 British pounds = 7,500,000
.71450 U.S. dollars =
(
)
$10,496,850.94
Purchased for: 6,800,000 British pounds = 6,800,000
.65320 US dollars =
-10,410,287.81
Profit
$
86,563.13
3. Write 25 kilometers using standard metric abbreviations. 25 km
4. Convert 1.05 mg to g. 1.05 mg = 001.05 mg = .00105 g
5. Your company markets almonds worldwide. Each container holds 12.5 ounces. Use the approximate equivalents of
Illustration 15-4 to determine what metric weight (to the nearest gram) should appear on the label.
12.5 oz ≈ (12.5 28.3495) g ≈ 354 g
6. While vacationing in New Zealand, you hear that the temperature is 30°. You realize, since it is a nice warm day, the
temperature is stated in degrees Celsius. What is the equivalent Fahrenheit temperature?
F = _59 C + 32 = _59 (30) + 32 = 54 + 32 = 86°F
Practice Test
353