Apple is selling 30,000 units in Europe at an average price of 1500 euros per unit. Both the spot and forward rates are $1.20/euro. The cost of each unit in dollars is $1300 per unit. The elasticity of demand for Apple computers in Europe is Euro= 1.5. Now consider a depreciation of Euro (relative to US $) from $1.20/ euro to $1.08/Euro and assume zero passthrough. What is Apple's exposure?a. $45 mnb. $20 mnc. Euro 45 mnd. Euro 20 mn Note: -You are attempting question 8 out of 12Apple is selling 30,000 units in Europe at an average price of €1,500 per unit. Both thespot and forward exchange rates are $1.20/€. The cost of each unit in dollars is $1,300per unit. The elasticity of demand for Apple computers in Europe is € = 1.5.Now consider a depreciation of Euro (relative to US dollar) from $1.20/€ to $1.08/€ andassume zero passthrough. What is Apple's exposure?a. $45 millionb. $20 millionc. €45 milliond. €20 million Note: -You are attempting question 8 out of 12Apple is selling 30,000 units in Europe at an average price of €1,500 per unit. Both thespot and forward exchange rates are $1.20/€. The cost of each unit in dollars is $1,300per unit. The elasticity of demand for Apple computers in Europe is € = 1.5.Now consider a depreciation of Euro (relative to US dollar) from $1.20/€ to $1.08/€ andassume zero passthrough. What is Apple's exposure?a. $45 millionb. $20 millionc. €45 milliond. €20 million

Number of units =30000 Exchange rate = 1.2$/€Cost per-unit = $1300Depreciation from 1.20 to 1.08…

Answered: Apple is selling 30,000 units in Europe…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Apple is selling 30,000 units in Europe at an average price of 1500 euros per unit. Both the spot and forward rates are $1.20/euro. The cost of each unit in dollars is $1300 per unit. The elasticity of demand for Apple computers in Europe is Euro= 1.5. Now consider a depreciation of Euro (relative to US $) from $1.20/ euro to $1.08/Euro and assume zero passthrough. What is Apple's exposure?

a. $45 mn

b. $20 mn

c. Euro 45 mn

d. Euro 20 mn

Note: -
You are attempting question 8 out of 12
Apple is selling 30,000 units in Europe at an average price of €1,500 per unit. Both the
spot and forward exchange rates are $1.20/€. The cost of each unit in dollars is $1,300
per unit. The elasticity of demand for Apple computers in Europe is € = 1.5.
Now consider a depreciation of Euro (relative to US dollar) from $1.20/€ to $1.08/€ and
assume zero passthrough. What is Apple's exposure?
a. $45 million
b. $20 million
c. €45 million
d. €20 million

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