A U.S. firm invested $1 million in a project in Brazil when the exchange rate was 1.63 Brazilian real per U.S. dollar. At the end of the year, the project returned 1.8 million Brazilian real, and
The exchange rate was 1.55 real per dollar. What was the U.S. firm's total return on this
Investment? Round your answer to the nearest tenth of a percent.

Question

Quizplus · Accepted Answer

1) The initial investment of $1 million was exchanged at a rate of 1.63 Brazilian real per U.S. dollar. Therefore, the company received 1,630,000 Brazilian real.
2) At the end of the year, the project returned 1.8 million Brazilian real, which, when exchanged at a rate of 1.55 real per dollar, is equivalent to $1,161,290.32.
3) The total return for the company is the sum of the initial investment and the final return, both in U.S. dollars. Therefore, the total return is $1,000,000 + $1,161,290.32 = $2,161,290.32.
4) To calculate the percentage return, we divide the total return by the initial investment and multiply by 100. Therefore, the percentage return is (2,161,290.32 / 1,000,000) * 100 = 216.129%.
5) Rounded to the nearest tenth of a percent, the answer is 16.1%.

A US Firm Invested $1 Million in a Project in Brazil