Problem regarding company operates with us dollars


Problem: A US company decides to buy a piece of manufacturing equipment from a Mexican company when the exchange rate is $1 US dollar = 18 Mexican Pesos. But by the time the company actually purchases the equipment, the US dollar lost value to the Mexican Peso, and the exchange rate was $1 US dollar = 15 Mexican Pesos. Assuming the US company operates with US dollars and has to pay for the equipment in Mexican Pesos, which of the following is true? Question options: The company paid the same amount of US dollars for the equipment than they thought when they decided to buy. The company paid less US dollars for the equipment than they thought when they decided to buy. The company paid more US dollars for the equipment than they thought when they decided to buy.

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Accounting Basics: Problem regarding company operates with us dollars
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