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    dollar-equivalent cost of a Toyota automobile

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    1. Assuming that Toyota obtains all inputs from Japanese suppliers and that the yen/dollar exchange rate is 200 yen per dollar. What is the dollar-equivalent cost of a Toyota automobile? Show your work.

    2. Assume that Toyota Inc. obtains all of its automobile inputs from Japanese suppliers. If the yen's exchange value appreciates from 200 yen = $1 to 100 yen = $1, what is the yen cost of a Toyota automobile? Show your work.

    3. Assume that Toyota Inc. imports steel from U.S. suppliers, whose costs are denominated in dollars, while all other inputs are obtained from Japanese suppliers whose costs are denominated in yen. If the yen's exchange value appreciates from 200 yen = $1 to 100 yen = $1, what will the dollar-equivalent cost of a Toyota automobile be? Show your work.
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    https://brainmass.com/economics/exchange-rates/dollar-equivalent-cost-of-a-toyota-automobile-60796

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    Hello!

    Question 1
    If the exchange rate is 200 yen = $1 and all the inputs come from Japanses suppliers, we must simply divide the costs of this inputs by 200 in order to obtain their dollar value:

    Labor 1,200,000 yens 1,200,000/200 = $6,000

    Steel 800,000 yens 800,000/200 = $4,000
    Other materials 1,600,000 yens 1,600,000/200 = $8,000
    Total materical costs =$12,000

    Other costs 400,000 yens 400,000/200 = $2,000

    Total costs 4,000,000 yens = $20,000

    Question ...

    Solution Summary

    Find the dollar-equivalent cost of a Toyota automobile.

    $2.19