Suppose your company imports computer motherboards from Singapore. The exchange rate is currently 1.2855 S$/US$. You have just placed an order for 24,000 motherboards at a cost to you of 231.00 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $194 each.
a) What is your profit at the current exchange rate?
b) What is your profit if the exchage rate goes up by 10 percent?
c) What is your profit if the exchange rate goes down by 10 percent?
d) What is the break-even exchange rate?
e) What percentage rise or fall does this represent in terms of the Singapore dollar versus the U.S. dollar?
Suppose your company imports computer motherboards from Singapore. The exchange rate is currently 1.2855 S$/US$. You have just placed an order for 24,000 motherboards at a cost to you of 231.00 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $194 each.
a) What is your profit at the current exchange rate?
b) What is your profit if the exchage rate goes up by 10 percent?
c) What is your profit if the exchange rate goes down by 10 percent?
d) What is the break-even exchange rate?
e) What percentage rise or fall does this represent in terms of the Singapore dollar versus the U.S. dollar?
Related questions
Suppose your company imports computer motherboards from Singapore. You have just placed an order for 40,000 motherboards at a cost to you of 143.80 Singapore dollars each. You will pay for the shipment when it arrives in 30 days. You can sell the motherboards for $138 each. The current exchange rate is S$1.1475/$. What is your profit at the current exchange rate?
| What is your profit if the exchange rate goes up by 10 percent prior to the shipment's arrival?
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