Question

Suppose your company imports computer motherboards from Singapore. The exchange rate is currently 1.2829 S$/US$. You have just placed an order for 29,000 motherboards at a cost to you of 237.00 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $195 each. What is your profit at the current exchange rate? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Profit at the current exchange rate What is your profit if the exchange rate goes up by 10 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Profit if the exchange rate up by 10% What is your profit if the exchange rate goes down by 10 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Negative amounts should be indicated by a minus sign.) Profit if the exchange rate down by 10% $ What is the break-even exchange rate? (Round your answer to 4 decimal places, e.g., 32.1616.) Break-even exchange rate S$ /$ What percentage rise or fall does this represent in terms of the Singapore dollar versus the U.S. dollar? (Input the value as a positive number. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Percentage change (Click to select) Fall Rise Book & Resources

Answer 1

a	Profit at the current exchange rate	$297,606.59
b	Profit when exchange rate rises by 10%	$784,642.36
c	Profit when exchange rate decreases by 10%	-$297,659.34
d	Breakeven exchange rate	1.2154
e	Percentage change	5.26%	Fall

Profit when exchange rate stays same
	Qty	Price/Unit	Cost	Ex Rate	USD Cost	SP p.u	Selling Price	Profit
Cost In Singapore Dollars	A	B	C=A*B	D	E=C/D	F	G=A*F	H=G-E
	29000	237	6,873,000	1.2829	5,357,393.41	195	5,655,000	297,606.59
Profit when exchange rate rises by 10%
	Qty	Price/Unit	Cost	Ex Rate	USD Cost	SP p.u	Selling Price	Profit
Cost In Singapore Dollars	A	B	C=A*B	D	E=C/D	F	G=A*F	H=G-E
	29000	237	6,873,000	1.41119	4,870,357.64	195	5,655,000	784,642.36
Profit when exchange rate goes down by 10%
	Qty	Price/Unit	Cost	Ex Rate	USD Cost	SP p.u	Selling Price	Profit
Cost In Singapore Dollars	A	B	C=A*B	D	E=C/D	F	G=A*F	H=G-E
	29000	237	6,873,000	1.15461	5,952,659.34	195	5,655,000	(297,659.34)
At Breakeven sales price should be equal to cost that is 5,655,000
Total USD Cost	5,655,000	A
Total Singapore Dollar cost	6,873,000	B
Desired Exchange Rate= B/A	1.2154
Percentage Decrease= (1.2829-1.2154)/1.2829	5.26%