Problem 18-6

Steve Harris, CFO of Alston Concrete Products, is currently evaluating the purchase of an innovative machine that tests the strength of concrete. The machine is sold only in England, and Alston has a price quote at 52500 from the manufacturer that's good for 60 days. Steve has read that the British pound is expected to strengthen against the dollar by 15% during the next two months. Currently the pound is worth $1.88 U.S. dollars.

If Steve believes the currency forecast is accurate, should Alston buy the machine now or wait until just before the price quote expires?

buy nowwaitbuy now

How much difference might the decision make in dollars? Round your answer to the nearest dollar. $ fill in the blank 2