Question

Suppose your company imports computer motherboards from Singapore. The exchange rate is currently 1.5134 S$/US$. You have just placed an order for 35,000 motherboards at a cost to you of 231.00 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $160 each. Calculate your profit if the exchange rates stay the same over the next 90 days. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Profit $ Calculate your profit if the exchange rate rises by 10 percent over the next 90 days. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Profit $ Calculate your profit if the exchange rate falls by 10 percent over the next 90 days. (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.) Profit $ What is the break-even exchange rate? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.) Break-even exchange rate S$ /$ What percentage decrease does this represent in terms of the Singapore dollar versus the U.S. dollar? (Enter you answer as a positive value. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Percentage decrease %

Answer 1

a) Profite = $ 257724.25

b) Profit = $ 743385.65

c) Loss = $ 335861.85

d) Break even exchange rate = S $ 1.4438

e) Percentage decrease = 15.13 %

Calculation is given in the below attached images

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PAGF DATE nex alculculation of Profit if Encehamnge feetes Stany same over the 90 days, Enchange ccate = 1.5134 58 tuss Porul order a 35000 motherboards Cost price : 5$ 231.00 Lmotherboard Sale price a $ 160 | motherboard o Cost us & Price per unit 231.00 11.5134 US & 752 63645 O o profit Los 8 per unit in 160 152.63645 2.6587.36355 o Potale profit us 8 7.3635 x 35000 257724.25 Poten profit t = US s 257724225 b calculation of profit_if_Enchange sises by 10 percenta Exchange rate = 1.5134 S$1 uss XCI+ 10%) 15134 58 / us & CL. 10 1.66474 s sluss 2 o cost per unit us s price in 231.00 1 66474 137.16041 US b Page

DATE: Progy unit in US $ 760 138 76041 21 23959 US s 2 o Total profit 2123959_x 35000 743385.65 ass Loret profit us 8 743385.65 ad calculation rate falls of by profit if exchage 10 % Exchange rate I. 5134 sslus 8 X (-10%) 1.5734 & Co.90) 1.36206 S 8 / us 8 Cost us & price per coit 231 | 1.36206 169 59605 us $ o profit per unit 169, 5960s as s 69.596052 us. Pored profit 9596or X 35000 -3358 61 75 Poted loss 33580 L. 75 Page 2

de calculation rate OF break even Escchange 231.00 1 4438 1. 160 erl calculation percentlige decrease 0 oold Exchange rate 1.5134 solusi opew Exchange 1. GCH 74 solus & - Cnew Ex rate - old Ex rate) x 100 % = (1 66474 3.5134) x 100 010 0.15134 x 100 % 15.134 % 1 وا from the cebore ccelculetion the positive velve of os o in terms of ss it means theat is Ceppreciateele by 15 13 % with respect to 58 auchen there rise Exchange rate by 10 ello, to old Ex rate 15134 s slus & oneen Ex rate 2 1. 36206 soluss o=crews Ex rate - old d. rath) x 100 % (1 5134 I. 362062 x 100 % -0.15134 x 100 2-15, 134 alo 2 from the above cellculation is the negative ralue of so, in terms of s sit means that is & is depreciated by 25. 13 % Ceith respreet to decrease Ex rate by 10%. Page 3