Would you please explain thoroughly which option is wiser, based on the attached photo? A manufacturer company in Taiwan sells its goods in 4 regions (North America, Europe, Asia, and Latin America), based on the exchanged rates differences, which decision the company should take to increase the volume of sales and net profit, suppose the average price in the industry is $225?Export with a high price than the average of the industry. Export with a lower price than the average of the industry.Not to export because the currency of other regions stronger than the Taiwanese dollar.Not to export because the Taiwanese dollar is stronger than other currencies, hence if the company export, the price will be high where other countries may refuse to trade due to high prices and weak currency in importer countries. Exchange RatesTaiwan dollars priced in regional currenciesAffecting Year 9Previous YearsYEAR 8YEAR 9REVENUE IMPACTU.S. S0.03580.03580.00%Euro0.03000.0302-3.33%Brazilian real0.17620.1809-13.34%Singapore S0.04810.04838%The sizes of the exchange rate adjustment each year are always equal to 5 times the actual period-to-period percentage change in the real-world exchange rates. Multiplying the actual % change by 5 isdone so as to translate exchange rate changes over the few days between decision periods intochanges that are more representative of a potential full-year change.

Exchange rate between two currencies is the rate at which the two currencies can be exchanged. It…

Answered: Would you please explain thoroughly…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Would you please explain thoroughly which option is wiser, based on the attached photo?

A manufacturer company in Taiwan sells its goods in 4 regions (North America, Europe, Asia, and Latin America), based on the exchanged rates differences, which decision the company should take to increase the volume of sales and net profit, suppose the average price in the industry is $225?

Export with a high price than the average of the industry.
Export with a lower price than the average of the industry.
Not to export because the currency of other regions stronger than the Taiwanese dollar.
Not to export because the Taiwanese dollar is stronger than other currencies, hence if the company export, the price will be high where other countries may refuse to trade due to high prices and weak currency in importer countries.

Exchange Rates
Taiwan dollars priced in regional currencies
Affecting Year 9
Previous Years
YEAR 8
YEAR 9
REVENUE IMPACT
U.S. S
0.0358
0.0358
0.00%
Euro
0.0300
0.0302
-3.33%
Brazilian real
0.1762
0.1809
-13.34%
Singapore S
0.0481
0.0483
8%
The sizes of the exchange rate adjustment each year are always equal to 5 times the actual period-to-
period percentage change in the real-world exchange rates. Multiplying the actual % change by 5 is
done so as to translate exchange rate changes over the few days between decision periods into
changes that are more representative of a potential full-year change.

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