The latimore company invested $8.5 million in a new plant in italy when the exchange rate was 1.1500 euros to the dollar. at the end of the year, the rate was 1.2000 euros to the dollar. (indirect quotes.)

a. did latimore make or lose money on the exchange rate movement? if so, how much?

b. what kind of exchange rate gain or loss was it?

c. what was the tax impact if latimore’s marginal tax rate is 40%?

Suppose that the u.s. dollars-mexican pesos exchange rate is fixed by the u.s. and mexican governments. assume also that labor is mobile between the united states and mexico due to low transportation costs.which of the following situations is likely to happen as a result of a simultaneous increase in the demand for u.s. goods and decrease in the demand for mexican goods? (pick mexican unemployment rate increases, and the country undergoes bad economic times for a sustained u.s. unemployment rate increases, and the country undergoes bad economic times for a sustained mexican unemployment rate rises at first, but it soon drops as unemployed mexicans move to the united states for mexican unemployment rate rises at first, but then it drops as mexican pesos depreciate against u.s. dollars.