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Harmony is a African mining company that exports 20 ounces of gold to the US. Gold is priced in US dollars but Harmonys are paid
Harmony is a African mining company that exports 20 ounces of gold to the US. Gold is priced in US dollars but Harmonys are paid in rand (the currency of South Africa). the current price of gold is 1,703 dollars per ounce. the current exchange rate is 18 rand(R) per $1. Harmony current mining costs are R14 per ounce. expected inflation rate are 2 in the US and 5 in South Africa (in %). what is harmony current level of profitability? [note: the amounts in the question are per ounce for simplicity even though they are not realistic]
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