Suppose your company imports computer motherboards from Singapore. The exchange rate is currently 1.3356 S$/US$. You have just placed an order for 30,000 motherboards at a cost to you of 218.50 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $175 each. a. Calculate your profit if the exchange rate stays the same over the next 90 days. Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. Calculate your profit if the exchange rate rises by 10 percent over the next 90 days. Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. c. Calculate your profit if the exchange rate falls by 10 percent over the next 90 days. Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. d. What is the break-even exchange rate? Note: Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616. e. What percentage decrease does this represent in terms of the Singapore dollar versus the U.S. dollar? Note: Enter your answer as positive value. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
Suppose your company imports computer motherboards from Singapore. The exchange rate is currently 1.3356 S$/US$. You have just placed an order for 30,000 motherboards at a cost to you of 218.50 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $175 each. a. Calculate your profit if the exchange rate stays the same over the next 90 days. Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. Calculate your profit if the exchange rate rises by 10 percent over the next 90 days. Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. c. Calculate your profit if the exchange rate falls by 10 percent over the next 90 days. Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. d. What is the break-even exchange rate? Note: Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616. e. What percentage decrease does this represent in terms of the Singapore dollar versus the U.S. dollar? Note: Enter your answer as positive value. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:**Scenario Overview:**
Your company imports computer motherboards from Singapore. The current exchange rate is 1.3356 S$/US$. An order for 30,000 motherboards costs 218.50 Singapore dollars each, payable in 90 days. The motherboards can be sold for $175 each.
**Questions:**
**a.** Calculate your profit if the exchange rate stays the same over the next 90 days.
- **Note:** Do not round intermediate calculations and round final answer to 2 decimal places.
**b.** Calculate your profit if the exchange rate rises by 10 percent over the next 90 days.
- **Note:** Do not round intermediate calculations and round final answer to 2 decimal places.
**c.** Calculate your profit if the exchange rate falls by 10 percent over the next 90 days.
- **Note:** Indicate negative answers with a minus sign. Do not round intermediate calculations and round final answer to 2 decimal places.
**d.** What is the break-even exchange rate?
- **Note:** Do not round intermediate calculations and round final answer to 4 decimal places.
**e.** What percentage decrease does this represent in terms of the Singapore dollar versus the U.S. dollar?
- **Note:** Enter answer as a positive value. Do not round intermediate calculations and round final answer to 2 decimal places.
**Table Format for Answers:**
| **a. Profit** | ___.__ |
| ------------------- | ------- |
| **b. Profit** | ___.__ |
| **c. Profit** | ___.__ |
| **d. Break-even exchange rate** | ___.____ S$/US$ |
| **e. Percentage decrease** | ___.__ % |
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