Cross rate: Trident Company recently purchased machinery parts worth 23.5 million Mexican pesos (MP). Management needs to find out the U.S. dollar cost of the payables. It has access to two quotes for Canadian dollars (C$): C$1.0774/$ and C$0.0981/MP. What will it cost Trident to purchase 23.5 million Mexican pesos? Round to the nearest dollar.

Question

Quizplus · Accepted Answer

To find the U.S. dollar cost, first convert Mexican pesos to Canadian dollars using the rate C$0.0981/MP: 23,500,000 MP * C$0.0981/MP = C$2,305,350. Then convert Canadian dollars to U.S. dollars using the rate C$1.0774/$: C$2,305,350 / 1.0774 = $2,139,735.

Cross Rate: Trident Company Recently Purchased Machinery Parts Worth 23