Suppose your company imports computer motherboards from Singapore. The exchange
ID: 2752198 • Letter: S
Question
Suppose your company imports computer motherboards from Singapore. The exchange rate is currently 1.2861 S$/US$. You have just placed an order for 28,000 motherboards at a cost to you of 232.00 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $195 each.
What is your profit at the current exchange rate? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
What is your profit if the exchange rate goes up by 10 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
What is your profit if the exchange rate goes down by 10 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Negative amounts should be indicated by a minus sign.)
What percentage rise or fall does this represent in terms of the Singapore dollar versus the U.S. dollar?(Input the value as a positive number. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
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Suppose your company imports computer motherboards from Singapore. The exchange rate is currently 1.2861 S$/US$. You have just placed an order for 28,000 motherboards at a cost to you of 232.00 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $195 each.
Explanation / Answer
(A) Cost in USD at current exchange rate = SGD 232/1.2861 = USD 180.3903
Selling Price per motherboard = $195
Number of units sold = 28,000
Total Profit = $409070.80
(B) New Exchange rate = 1.15749/USD
Cost of each unit in USD at new rate = SGD 232/1.15749 = $200.4337
Total Profit = 28,000 * ($195-$200.4337) = - $152144 (Loss)
(C) New Exchange rate = 1.41471/USD
Cost of each unit in USD at new rate = SGD 232/1.41471 = $163.9912
Total Profit = 28,000 * ($195-$163.9912) = $868246.20
(D) Break-even exchange rate is when $195 = SGD232
=> Exchange Rate = SGD1.189744/USD
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