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 $175 each. a. Calculate your profit if the exchange rate stays the same over the next 90 days. Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. Calculate your profit if the exchange rate rises by 10 percent over the next 90 days. Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. c. Calculate your profit if the exchange rate falls by 10 percent over the next 90 days. Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. d. What is the break-even exchange rate? Note: Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616. e. What percentage decrease does this represent in terms of the Singapore dollar versus the U.S. dollar? Note: Enter your answer as positive value. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
![Suppose your company imports computer motherboards from Singapore. The exchange rate is currently 1.3356
S$/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 $175 each.
a. Calculate your profit if the exchange rate stays the same over the next 90 days.
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
b. Calculate your profit if the exchange rate rises by 10 percent over the next 90 days.
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
c. Calculate your profit if the exchange rate falls by 10 percent over the next 90 days.
Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and
round your answer to 2 decimal places, e.g., 32.16.
d. What is the break-even exchange rate?
Note: Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.
e. What percentage decrease does this represent in terms of the Singapore dollar versus the U.S. dollar?
Note: Enter your answer as positive value. Do not round intermediate calculations and enter your answer
as a percent rounded to 2 decimal places, e.g., 32.16.
a. Profit
b. Profit
c. Profit
d. Break-even exchange rate
e. Percentage decrease
S$
/$
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2f4facc4-fd17-4182-865d-7e91727d74d3%2F85218ac4-7011-41fe-b139-85cf14434de8%2F5zcfmx6_processed.png&w=3840&q=75)
Transcribed Image Text: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 $175 each.
a. Calculate your profit if the exchange rate stays the same over the next 90 days.
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
b. Calculate your profit if the exchange rate rises by 10 percent over the next 90 days.
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
c. Calculate your profit if the exchange rate falls by 10 percent over the next 90 days.
Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and
round your answer to 2 decimal places, e.g., 32.16.
d. What is the break-even exchange rate?
Note: Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.
e. What percentage decrease does this represent in terms of the Singapore dollar versus the U.S. dollar?
Note: Enter your answer as positive value. Do not round intermediate calculations and enter your answer
as a percent rounded to 2 decimal places, e.g., 32.16.
a. Profit
b. Profit
c. Profit
d. Break-even exchange rate
e. Percentage decrease
S$
/$
%
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Essentials Of Investments](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260013924/9781260013924_smallCoverImage.jpg)
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
![FUNDAMENTALS OF CORPORATE FINANCE](https://www.bartleby.com/isbn_cover_images/9781260013962/9781260013962_smallCoverImage.gif)
![Financial Management: Theory & Practice](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)
![Essentials Of Investments](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260013924/9781260013924_smallCoverImage.jpg)
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
![FUNDAMENTALS OF CORPORATE FINANCE](https://www.bartleby.com/isbn_cover_images/9781260013962/9781260013962_smallCoverImage.gif)
![Financial Management: Theory & Practice](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)
![Foundations Of Finance](https://www.bartleby.com/isbn_cover_images/9780134897264/9780134897264_smallCoverImage.gif)
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
![Fundamentals of Financial Management (MindTap Cou…](https://www.bartleby.com/isbn_cover_images/9781337395250/9781337395250_smallCoverImage.gif)
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
![Corporate Finance (The Mcgraw-hill/Irwin Series i…](https://www.bartleby.com/isbn_cover_images/9780077861759/9780077861759_smallCoverImage.gif)
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education