5. Suppose the price of white truffles is 400 euros per kilo in Paris and price of a euro is 1.453 Swiss francs. With transportation and transactions costs, such as insurance, of $1 \%$ in moving truffles from Paris to Geneva, within what range do you expect to observe the price of white truffles in Geneva?

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Accepted Answer

∻Solution∻ ‖ a ⋮ Conversion of Price: First, convert the price of white truffles from euros to Swiss francs. The price in Paris is 400 euros per kilo. Given the exchange rate is 1.453 Swiss francs per euro, the price in Swiss francs is $400 imes 1.453 = 581.2$ Swiss francs per kilo. ‖ ‖ b ⋮ Transportation and Transaction Costs: Next, account for the transportation and transaction costs, which are 1% of the price. The cost in Swiss francs is $581.2 imes 0.01 = 5.812$ Swiss francs. ‖ ‖ c ⋮ Total Cost in Geneva: Add the transportation and transaction costs to the converted price to get the total cost in Geneva. The total cost is $581.2 + 5.812 = 587.012$ Swiss francs per kilo. ‖ ‖ d ⋮ Price Range: Considering the transportation and transaction costs, the price of white truffles in Geneva should be within the range of 581.2 to 587.012 Swiss francs per kilo. ‖ ∻Answer∻ ⚹ The price of white truffles in Geneva is expected to be within the range of 581.2 to 587.012 Swiss francs per kilo. ⚹ ∻Key Concept∻ ⚹ Exchange Rate and Transaction Costs ⚹ ∻Explanation∻ ⚹ The price of a good in a different market can be determined by converting the price using the exchange rate and adding any transportation and transaction costs. ⚹◊What is the formula to calculate the expected price range of white truffles in Geneva considering transportation and transaction costs?⍭ Generate me a similar question◊

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