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A Kenyan businessman imports wheat from the United States at an initial cost of 500 dollars per tonne.

A Kenyan businessman imports wheat from the United States at an initial cost of 500 dollars per tonne. He then pays 20% of this amount as shipping costs and 10% of the same amount as customs duty. When the wheat reaches Mombasa the man has to pay 5% of the initial cost to transport it to Nairobi.
a) Given that one US dollar = sh 54.60 calculate the total cost of importing one tonne of wheat in shs
b) The businessman intends to make a profit of 20%. Giving your answer to the nearest ten cents, calculate the price at which he must sell the wheat per kg

Answers

John
a) Initial cost = 500 dollars

Shipping cost

$\frac{20}{100}$ x 500 = 100

Customs duty

$\frac{10}{100}\times 100$ = 500

Transport

$\frac{5}{100}$ x 500 = 25

Total cost in U.S dollar

= 100 + 50 + 25 + 500

= 625

1 U.S dollar = sh 54. 60

675 U.S dollar = sh 54.60
675 U.S dollar?

675 x 54.60

= sh 36 855

b) $\frac{54.60\times 675\times 120}{100\times 1000}$
johnmulu answered the question on March 6, 2017 at 12:55

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