Ranbaxy (India) in Brazil. Ranbaxy, an India-based pharmaceutical firm, has continuing problems with its cholesterol reduction product's price in one of its rapidly growing markets, Brazil. All product is produced in India, with costs and pricing initially stated in Indian rupees (Rps), but converted to Brazilian reais (R$) for distribution and sale in Brazil. In 2009, the unit volume was priced at Rps21,800, with a Brazilian reais price set at R$896. But in 2010, the reais appreciated in value versus the rupee, averaging Rps26.42 = R$1.00. In order to preserve the reais price and product profit margin in rupees, what should the new rupee price be set at? First, the implied spot exchange rate for the previous year, 2009 must be found. The implied spot exchange rate for the previous year, 2009 is Rps /R$. (Round to two decimal places.)
Ranbaxy (India) in Brazil. Ranbaxy, an India-based pharmaceutical firm, has continuing problems with its cholesterol reduction product's price in one of its rapidly growing markets, Brazil. All product is produced in India, with costs and pricing initially stated in Indian rupees (Rps), but converted to Brazilian reais (R$) for distribution and sale in Brazil. In 2009, the unit volume was priced at Rps21,800, with a Brazilian reais price set at R$896. But in 2010, the reais appreciated in value versus the rupee, averaging Rps26.42 = R$1.00. In order to preserve the reais price and product profit margin in rupees, what should the new rupee price be set at? First, the implied spot exchange rate for the previous year, 2009 must be found. The implied spot exchange rate for the previous year, 2009 is Rps /R$. (Round to two decimal places.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:Ranbaxy (India) in Brazil. Ranbaxy, an India-based pharmaceutical firm, has continuing problems with its cholesterol reduction product's price in one of its rapidly growing markets, Brazil. All product is produced
in India, with costs and pricing initially stated in Indian rupees (Rps), but converted to Brazilian reais (R$) for distribution and sale in Brazil. In 2009, the unit volume was priced at Rps21,800, with a Brazilian reais
price set at R$896. But in 2010, the reais appreciated in value versus the rupee, averaging Rps26.42 = R$1.00. In order to preserve the reais price and product profit margin in rupees, what should the new rupee
price be set at?
First, the implied spot exchange rate for the previous year, 2009 must be found.
The implied spot exchange rate for the previous year, 2009 is Rps /R$. (Round to two decimal places.)
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