Consider a firm that sells its product in both the U.S. and the U.K. U.S. demand is for 12,000 units, and the U.S. production capacity is 17,000 units. Demand in the U.K. is for 8,000 units, and the U.K. production capacity is 14,000 units. Production cost in the U.S. is $3.1, and production cost in the U.K. is £6. The current exchange rate is $1.38 = £1. The shipping cost is $1.4 per unit for any units shipped between the two countries. Sales prices equate to $110 in each country. U.S. 17000 units. U.K. = units. b) How much is the profit for each country? U.S. Profit=$ U.K. Profit = $ (round your response to the nearest dollar). (round your response to the nearest dollar).
Consider a firm that sells its product in both the U.S. and the U.K. U.S. demand is for 12,000 units, and the U.S. production capacity is 17,000 units. Demand in the U.K. is for 8,000 units, and the U.K. production capacity is 14,000 units. Production cost in the U.S. is $3.1, and production cost in the U.K. is £6. The current exchange rate is $1.38 = £1. The shipping cost is $1.4 per unit for any units shipped between the two countries. Sales prices equate to $110 in each country. U.S. 17000 units. U.K. = units. b) How much is the profit for each country? U.S. Profit=$ U.K. Profit = $ (round your response to the nearest dollar). (round your response to the nearest dollar).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Consider a firm that sells its product in both the U.S. and the U.K. U.S. demand is for
12,000 units, and the U.S. production capacity is 17,000 units. Demand in the U.K. is for
8,000 units, and the U.K. production capacity is 14,000 units. Production cost in the U.S. is
$3.1, and production cost in the U.K. is £6. The current exchange rate is $1.38 = £1. The
shipping cost is $1.4 per unit for any units shipped between the two countries. Sales prices
equate to $110 in each country.
U.S.
U.K. =
17000 units.
units.
b) How much is the profit for each country?
U.S. Profit = $
U.K. Profit = $
(round your response to the nearest dollar).
(round your response to the nearest dollar).
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