assume that American rice sells for 100.00 per bushel, japanese rice sells for 16,000 yen per bushel, and the exchange rate is 80 yen per 1 dollar. what would be your profit per bushel of rice, and how you can make a profit in this situation
To determine the profit per bushel of rice, we need to compare the cost of buying rice in yen and selling it in dollars. Let's break it down step by step:
1. Convert the price of Japanese rice from yen to dollars using the exchange rate:
Japanese rice price = 16,000 yen
Exchange rate = 80 yen per 1 dollar
Japanese rice price in dollars = 16,000 yen / 80 yen per dollar = $200.00
2. Calculate the profit per bushel of rice:
American rice selling price = $100.00
Japanese rice cost price = $200.00
Profit per bushel = Selling price - Cost price
Profit per bushel = $100.00 - $200.00 = -$100.00
Here, the profit per bushel would be -$100.00, indicating a loss.
So, in this situation, you would be facing a loss of $100.00 per bushel of rice if you bought Japanese rice at the given price and sold it at the American rice selling price.
To make a profit in this scenario, you would need to find a way to either decrease the cost of buying Japanese rice or increase the selling price. For example, you could negotiate a lower price for Japanese rice or find a market where you can sell it at a higher price.
To calculate the profit per bushel of rice, we need to compare the cost of acquiring the rice to the selling price.
1. Convert the selling price of Japanese rice to dollars:
Japanese rice price = 16,000 yen per bushel
Exchange rate = 80 yen per 1 dollar
Japanese rice price in dollars = 16,000 yen / 80 yen per dollar
= 200 dollars per bushel
2. Calculate the cost of acquiring the rice:
American rice cost = 100 dollars per bushel
Japanese rice cost = 200 dollars per bushel
3. Calculate the profit per bushel:
Profit per bushel = Selling price - Cost price
= 200 dollars - 100 dollars
= 100 dollars
Therefore, the profit per bushel of rice in this situation would be 100 dollars.
To make a profit, you would need to buy Japanese rice at 200 dollars per bushel and sell it in the American market at 100 dollars per bushel. This is because the selling price of Japanese rice in the American market is lower than the cost price, resulting in a profit of 100 dollars per bushel.