An importer wants to purchase \(N\) high quality cameras from Germany and sell them in Japan. The cost in Germany of

BTGmoderatorLU wrote: ↑

Sat May 06, 2023 12:42 pm

Source: Magoosh

An importer wants to purchase \(N\) high quality cameras from Germany and sell them in Japan. The cost in Germany of each camera is \(E\) euros. He will sell them in Japan at \(Y\) yen, which will bring in a profit, given that the exchange rate is \(C\) yen per euro. Given the exchange rate of \(D\) US Dollars per euro, which of the following represents his profit in dollars?

A. \(N(YC - DE)\)

B. \(ND(YC - E)\)

C. \(ND[(Y/C) - E]\)

D. \(N[(Y/C) - DE]\)

E. \(ND(Y - E)/C\)

The OA is C

Cost per Camera \(= E (\text{euros})\)

Selling Price per Camera \(= Y (\text{yen}) \cdot \left[\dfrac{1 (\text{euro})}{C (\text{yen})}\right] = \dfrac{Y}{C} (\text{euro})\)

Profit in Euros \(=\) (Selling Price per Camera) \(\cdot N\) Cameras \(-\) (Cost per Camera) \(\cdot N\) Cameras

Profit in Euros \(= \left(\dfrac{Y}{C}\right) \cdot N - (E) \cdot N\)

----take \(N\) as Common-----

Profit in Euros \(= N \cdot \left[\dfrac{Y}{C} - E \right]\)

Lastly, need to convert to Dollars: \(\dfrac{D (\text{dollars})}{1 (\text{euro})}\)

\(N \cdot \left[ \dfrac{Y}{C} - E \right] (\text{euros}) \cdot \left[ \dfrac{D (\$)}{1 (\text{euro})} \right] =\)

\(N \cdot D \cdot \left[ \left(\dfrac{Y}{C}\right) - E \right]\) Dollars Profit

Therefore, C