The U.S. exports computers with a domestic price of $100,000 and the y

The U.S. exports computers with a domestic price of $100,000 and the yen/dollar exchange rate is 120 on January 1, 2003. On January 1, 2004 the yen/dollar exchange rate is 125.

What is the yen price of the computers on January 1, 2003? What is the yen price of the computers on January 1, 2004?

ANSWER

January 1, 2003: $100,000 × 120 yen/dollar = 12,000,000 yen

January 1, 2004: $100,000 × 125 yen/dollar = 12,500,000 yen