Suppose that two countries, vietnam and côte d’ivoire, produce coffee. the currency unit used in vietnam is the dong (vnd). côte d’ivoire is a member of communauté financiére africaine (cfa), a currency union of west african countries that use the cfa franc (xof). in vietnam, coffee sells for 5,000 dong (vnd) per pound of coffee. the exchange rate is 30 vnd per 1 cfa franc, evnd/xof = 30.

a. if the law of one price holds, what is the price of coffee in côte d’ivoire, measured in cfa francs?

b. assume the price of coffee in côte d’ivoire is actually 160 cfa francs per pound of coffee. compute the relative price of coffee in côte d’ivoire versus vietnam. where will coffee traders buy coffee? where will they sell coffee in this case? how will these transactions affect the price of coffee in vietnam? in côte d’ivoire?

Which financial component is a mandatory deduction from your gross pay? a. sales tax b. social security tax c. health insurance d. disaster relief fund (drf) e. voluntary deduction

Select the correct answer the smith family adopted a child. the adoption procedure took about three months, and the family incurred various expenses. will the smiths receive and financial benefit for the taxable year? a) they will not receive any financial benefit for adopting the child b) their income tax component will decrease c) they will receive childcare grants d) they will receive a tax credit for the cost borne for adopting the child e) they will receive several tax deductions

Blue computers, a major pc manufacturer in the united states, currently has plants in kentucky and pennsylvania. the kentucky plant has a capacity of 1 million units a year and the pennsylvania plant has a capacity of 1.5 million units a year. the firm divides the united states into five markets: northeast, southeast, midwest, south, and west. each pc sells for $1,000. the firm anticipates a 50 perc~nt growth in demand (in each region) this year (after which demand will stabilize) and wants to build a plant with a capacity of 1.5 million units per year to accommodate the growth. potential sites being considered are in north carolina and california. currently the firm pays federal, state, and local taxes on the income from each plant. federal taxes are 20 percent of income, and all state and local taxes are 7 percent of income in each state. north carolina has offered to reduce taxes for the next 10 years from 7 percent to 2 percent. blue computers would like to take the tax break into consideration when planning its network. consider income over the next 10 years in your analysis. assume that all costs remain unchanged over the 10 years. use a discount factor of 0.1 for your analysis. annual fixed costs, production and shipping costs per unit, and current regional demand (before the 50 percent growth) are shown in table 5-13. (a) if blue computers sets an objective of minimizing total fixed and variable costs, where should they build the new plant? how should the network be structured? (b) if blue computers sets an objective of maximizing after-tax profits, where should they build the new plant? how should the network be structured? variable production and shipping cost ($/unit) annual fixed cost northeast southeast midwest south west (million$) kentucky 185 180 175 175 200 150 pennsylvania 170 190 180 200 220 200 n. carolina 180 180 185 185 215 150 california 220 220 195 195 175 150 demand ('000 units/month) 700 400 400 300 600