Referring to question (The Apex Supplies Corporation needs to acquire €100 million in funds to expand their facilities.) ,at what end-of-year exchange rate will the dollar costs of borrowing Belgian francs or dollars be equal?
A)BF63.1/$
B)BF61.2/$
C)BF56.3/$
D)BF60.8/$

Question

Referring to question (The Apex Supplies Corporation needs to acquire €100 million in funds to expand their facilities.)  ,at what end-of-year exchange rate will the dollar costs of borrowing Belgian francs or dollars be equal?
A)BF63.1/$
B)BF61.2/$
C)BF56.3/$
D)BF60.8/$

Quizplus · Accepted Answer

To find the end-of-year exchange rate where the dollar costs of borrowing Belgian francs or dollars are equal, we can set the two costs equal to each other and solve for the exchange rate. Let's call the exchange rate X. 
Cost of borrowing €100 million in Belgian francs = BF100,000,000/X 
Cost of borrowing €100 million in dollars = $100,000,000/X 
Setting these two costs equal: BF100,000,000/X = $100,000,000/X 
Simplifying: BF100,000,000 = $100,000,000(X) 
Dividing both sides by $100,000,000: BF1 = X 
Therefore, the end-of-year exchange rate where the costs of borrowing Belgian francs or dollars are equal is BF1 = $0.612 = BF61.2/$.

Referring to Question (The Apex Supplies Corporation Needs to Acquire