Suppose your company imports computer motherboards from Singapore. The exchange
ID: 2498290 • Letter: S
Question
Suppose your company imports computer motherboards from Singapore. The exchange rate is currently 1.5137 S$/US$. You have just placed an order for 38,000 motherboards at a cost to you of 231.15 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $163 each. (Enter your answer as directed, but do not round intermediate calculations.)
Calculate your profit if the exchange rates stay the same over the next 90 days.(Round your answer to 2 decimal places (e.g., 32.16).)
Calculate your profit if the exchange rate rises by 9 percent over the next 90 days.(Round your answer to 2 decimal places (e.g., 32.16).)
Calculate your profit if the exchange rate falls by 9 percent over the next 90 days.(Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places (e.g., 32.16).)
What is the break-even exchange rate? (Round your answer to 4 decimal places (e.g., 32.1616).)
What percentage decrease does this represent in terms of the Singapore dollar versus the U.S. dollar?(Input the amount as positive value. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).)
%
Please explain how you get to your answer, Thanks!
Suppose your company imports computer motherboards from Singapore. The exchange rate is currently 1.5137 S$/US$. You have just placed an order for 38,000 motherboards at a cost to you of 231.15 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $163 each. (Enter your answer as directed, but do not round intermediate calculations.)
Explanation / Answer
(a) Cost of motherboard in singapore dollars = $231.15
So profit = 38,000 {163 - ( 231.15/1.5137)}
= $391,198.92
(b) New exchange rate = 1.5137 @109% = $1.649933
Profit = 38,000{ 163 - (231.15/1.649933)}
Profit = $870,329.28
(C) New exchange rate = $1.5137@83% = $1.377467
Profit = 38,000{ 163 - (231.15 / 1.377467)}
= (182,704) loss
(2) break even exchage rate = no profit no loss
= 231.15/163
= $1.418098159
(3)Percentage decrease = (1.5137 - 1.418098159)/1.5137 = 6.32% decrease
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