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If the revenue last quarter was 4.0 million EUR and the expenses were 3.7 million USD,...

If the revenue last quarter was 4.0 million EUR and the expenses were 3.7 million USD, then what would the USD/EUR exchange rate have to be for the profit margin to equal 14.0%? Report your answer rounded to exactly four decimal places. If the value is 2.104 or 2.10403, enter 2.1040 as your response. USD/EUR:1.1567

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Answer #1

Profit margin = 14%

Net Income/Revenue = 0.14

Net Income = Revenue * 0.14

Net Income = 4 * 0.14 = 0.56 million EUR

Net Income = Revenue - Expenses

0.56 million = 4 - Expenses

Expenses = 4 - 0.56

Expenses = 3.44 million EUR

We need to find the exchange rate such that this expenses in EUR = 3.7 million USD

3.44 EUR = 3.7 USD

USD/EUR = 3.7/3.44

USD/EUR = 1.0755813953 ~ 1.0756 USD/EUR

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