Video streaming service Netflix is expanding rapidly around the globe. It is currently available in 50 countries with the goal of expanding to 200 countries by the end of 2016. The next countries to get Netflix are Italy, Spain, and Portugal. Similar to Netflix's other European offerings, service will be offered at a price of euro 8.29 per month, which converts to U.S. $9.10 during the time of expansion. There are television 18,877,900 households in Spain, with 80 percent having high-speed Internet. Assume 45 percent of the households are willing and able to purchase the service and would purchase one subscription at an average price of euro 8.29 per month ($9.10). Calculate the annual market sales potential for Spain in euros and U.S. dollars. Is the dollar strong or weak compared to the euro? Why are U.S.-based international companies concerned when the U.S. dollar is strong compared to other currencies?

The number of households in the market can be estimated as ____ (round to the nearest whole number)

The quantity purchased by household per year is ____ (round to the nearest whole number)

Determine the average prices per year. (Round to the nearest cent.)

Average price per year Euro___ USD____

Estimate the values of the annual market sales potential for Spain. (Round to the nearest whole number.)

Annual market sales potential, million Euro_____ USD_____

The dollar is (weaker/stronger) than euro as far as the conversion rate is (blank) per 1$. (Round to the nearest cent.)

Why are U.S.-based international companies concerned when the U.S. dollar is strong compared to other currencies?

A.A strong dollar makes exports from other countries cheaper resulting in higher employment level in the U.S. that leads to increased U.S.-based international companies' costs.

B.A strong dollar makes exports from other countries more attractive to the U.S. consumers, causing increased price competition for U.S.-based international companies.

C.A strong dollar makes travel in the U.S. more affordable for foreigners that in turn helps U.S. production and employment.

D.A stronger currency is generally perceived to be inflationary so higher costs for foreign goods bring inflation which undermines the competitiveness U.S.-based international companies.