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Author Question: A bottle of German wine costs 21 (euros) in Berlin. According to the purchasing power parity ... (Read 194 times)

ENagel

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on: Jul 10, 2018
A bottle of German wine costs 21 (euros) in Berlin. According to the purchasing power parity
  theory,
 
  what would the bottle sell for in New York if it costs the New York company 1.25 per
  bottle to transport the wine to the United States? Assume the exchange rate is 1.32 per euro.
  A) 40.54 B) 39.50 C) 28.97 D) 27.22

Question 2

Your firm intends to finance the purchase of a new construction crane. The cost is 1,500,000. What is the size of the first payment if the crane is financed with an interest-only loan at an annual rate of 8.50?
 
  A) 228,611.56
  B) 127,500.00
  C) 3,391,475.16
  D) There is not enough information to answer this question.


af

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Reply #1 on: Jul 10, 2018
Answer to Question 1

C

Answer to Question 2

Answer: B
Explanation: B) PMT = r  PV = .085  1,500,000 = 127,500.


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