N Home - NetflixSolutions.XISX (37.4 KB)AYX Love Island -...Problem 1.3 Peng Plasma Pricingcanvas.liverpool.ac.ukYear20072008200920102011201220132014CumulativeCost(Rmb)16,00015,40014,80014,70014,20014,40014,60014,800Peng Plasma is a privately held Chinese business. It specializes in the manufacture of plasma cutting torches. Over the past eightyears it has held the Chinese renminbi price of the PT350 cutting torch fixed at Rmb 18,000 per unit. Over that same period ithas worked to reduce costs per unit, but has struggled of late due to higher input costs. Over that same period the renminbi hascontinued to be revalued against the U.S. dollar by the Chinese government. After completing the table - assuming the sameprice in renminbi for all years - answer the following questions.CostACFI260 Fin...a. What has been the impact of Peng's pricing strategy on the US$ price? How would you expect their U.S. dollar-basedcustomers to have reacted to this?b. What has been the impact on Peng's margins from this pricing strategy?Fixed Rmb Pricing of the PT350 Plasma Cutting TorchMargin(Rmb)2,0002,6003,2003,3003,8003,6003,4003,200MarginPrice(Rmb)Fixed Rmb Pricing of the PT350 Plasma Cutting Torch18,00018,00018,00018,00018,00018,00018,00018,000Seminar1Pro...Priceanaiscde - T...Margin Average Rate(percent) (Rmb/US$)11.1%14.4%17.8%18.3%21.1%20.0%18.9%17.8%7.616.956.836.776.46b Login | bart....6.316.156.16Margin Average Rate↓Price Percent Chg(US$) in US$ Price2,3652,5902,6352,6592,7862,8532,9272,9229.50%1.76%0.89%4.80%2.38%2.60%-0.16%23.54%Price Percent Chg+0b Login | bart!...

Exchange rate refers to the rate at which one country's currency is exchanged for the other…

Peng Plasma is a privately held Chinese business. It specializes in the manufacture of plasma cutting torches. Over the past eight years it has held the Chinese renminbi price of the PT350 cutting torch fixed at Rmb 18,000 per unit. Over that same period it has worked to reduce costs per unit, but has struggled of late due to higher input costs. Over that same period the renminbi has continued to be revalued against the U.S. dollar by the Chinese government. After completing the table - assuming the same price in renminbi for all years - answer the following questions.

Peng Plasma is a privately held Chinese business. It specializes in the manufacture of plasma cutting torches. Over the past eight years it has held the Chinese renminbi price of the PT350 cutting torch fixed at Rmb 18,000 per unit. Over that same period it has worked to reduce costs per unit, but has struggled of late due to higher input costs. Over that same period the renminbi has continued to be revalued against the U.S. dollar by the Chinese government. After completing the table - assuming the same price in renminbi for all years - answer the following questions.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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N Home - Netflix
Solutions.XISX (37.4 KB)
AY
X Love Island -...
Problem 1.3 Peng Plasma Pricing
canvas.liverpool.ac.uk
Year
2007
2008
2009
2010
2011
2012
2013
2014
Cumulative
Cost
(Rmb)
16,000
15,400
14,800
14,700
14,200
14,400
14,600
14,800
Peng Plasma is a privately held Chinese business. It specializes in the manufacture of plasma cutting torches. Over the past eight
years it has held the Chinese renminbi price of the PT350 cutting torch fixed at Rmb 18,000 per unit. Over that same period it
has worked to reduce costs per unit, but has struggled of late due to higher input costs. Over that same period the renminbi has
continued to be revalued against the U.S. dollar by the Chinese government. After completing the table - assuming the same
price in renminbi for all years - answer the following questions.
Cost
ACFI260 Fin...
a. What has been the impact of Peng's pricing strategy on the US$ price? How would you expect their U.S. dollar-based
customers to have reacted to this?
b. What has been the impact on Peng's margins from this pricing strategy?
Fixed Rmb Pricing of the PT350 Plasma Cutting Torch
Margin
(Rmb)
2,000
2,600
3,200
3,300
3,800
3,600
3,400
3,200
Margin
Price
(Rmb)
Fixed Rmb Pricing of the PT350 Plasma Cutting Torch
18,000
18,000
18,000
18,000
18,000
18,000
18,000
18,000
Seminar1Pro...
Price
anaiscde - T...
Margin Average Rate
(percent) (Rmb/US$)
11.1%
14.4%
17.8%
18.3%
21.1%
20.0%
18.9%
17.8%
7.61
6.95
6.83
6.77
6.46
b Login | bart....
6.31
6.15
6.16
Margin Average Rate
↓
Price Percent Chg
(US$) in US$ Price
2,365
2,590
2,635
2,659
2,786
2,853
2,927
2,922
9.50%
1.76%
0.89%
4.80%
2.38%
2.60%
-0.16%
23.54%
Price Percent Chg
+0
b Login | bart!...

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