A European car company is trying to decide if they should manufacture their vehicles for the US market in Europe, or in the United States. Please do the calculations that will help this company come to a decision.

Sale price of vehicle in the United States - $35,500

Cost to manufacture the car in Europe, deliver and import to US: 20,000 Euros

Cost to import the vehicle into the United States $4,500

Cost to manufacture the vehicles in the United States - $28,500

Question #4

Suppose the exchange rate is near 1 Euro = $1.30. What would be the profit for the European car company (in Euros) if they manufactured their car in Europe? Remember, they have to pay the import tax.

heres the options:

5,385

23,461

20,300

7,000

5,850

3,846.2

25,850

27,308

5000.1

Question #5 Suppose the exchange rate is near 1 Euro = $1.30. What would be the profit for the European car company (in Euros) if they manufactured their car in the United States? Remember, they avoid the import tax.

heres the options:

20,300

7,000

27,308

5,385

23,461

3,846.2

25,850

5384.6

5000.1