Assignment # 5

Solutions:

1 ▶ Work out the price in US dollars of the machines sold by Ronnie Mackay to the US firm (assume £1 =
US$1.50).

The price in dollars is given by:

£3 600 000 × US$1.5 = US$5 400 000

2 ▶ Work out the amount paid in pounds by Ronnie Mackay for the €2.5 million of components bought
from Germany (assume £1 = €1.10).

The sterling price of the German components is given by:

€2.5 million ÷ €1.10 = £2 272 727

3 ▶ Work out the amount in euros received by the Spanish supplier for the £200 000 of materials sold
to Ronnie Mackay (assume £1 = €1.10).

The amount in euros received by the Spanish supplier is given by:

£200 000 × €1.10 = €220 000

MCQs:

1) B
2) A
3) C
4) D

▶ Describe two external factors that have contributed to the development of EVs.

Growing concern about the damage done to the environment has encouraged the development of EVs.
The carbon emissions from vehicles contribute to global warming. Also, the rising cost of oil has made
driving more expensive and consumers may welcome alternatives, although in 2014 the price of oil fell
quite sharply so this reason may have carried less weight at that time.

2 ▶ What are the advantages of EVs for consumers? Give at least two advantages in your analysis.

EVs will be more environmentally friendly because they will not release carbon into the atmosphere.
Many consumers will see this as an advantage. The car is also cheap to run. It is expected to cost about
US$0.04 per mile (US$0.06 per kilometre). Also, the batteries used to power the car can be recharged in
four hours and have a range of 107 miles (about 170 km) on one charge.

3 ▶ Assess the impact global oil prices might have on the plans of car manufacturers in the future.

Although the price of oil has fallen by over 50 per cent since 2014, according to the graph in Figure 13.2,
this may only be a short-term change. In the future, oil prices might rise back to previous levels or
beyond; this will make EVs even more attractive. However, even if oil prices remained low, it is possible
that car manufacturers will ‘push’ EVs in the marketplace. One reason for this is that they have probably
invested heavily in R&D and will want to recover the outlay. But also, people are still becoming
increasingly concerned about the damage done by emissions to the environment and therefore might
start to buy EVs on a large scale.

MCQs:

1) D
2) A
3) D
4) C