In the United States, we can buy a road bicycle for 2,500 USD. These bikes are identical in every way, shape, and form to road bikes from Taiwan that be purchased for 75,000 TWD (Taiwanese New Dollars) including shipping costs
From whom should we order the bike if we can exchange 1 USD for 32 TWD?
A) Buy from the USA, as we save $156.25.
B) Buy from Taiwan, as we save $156.25.
C) Buy from the USA, as we save $104.00.
D) It does not matter because the prices are identical.
Answer: B
Explanation: B) Cost of Taiwanese bike = 75,000 TWD/(32 TWD per USD) = $2,343.75. Thus, we would be better off ordering from the U.S. as they are cheaper by $2,500 - $2,343.75 = $156.25.
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