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Firm X a U.S. based exporter that exclusively sells its products in Great Britain. Firm...

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Question

Accounting

Firm X a U.S. based exporter that exclusively sells its products in Great Britain. Firm X, expects to sell 15,000 units at a price of GBP 10.00 per unit. Firm X produces in Newport News, VA and has a variable production cost of USD 7.00 per unit, and total fixed costs of USD 60,000. What is Firm Xs FX operating exposure? Please use 1.50 as a base FX rate for your analysis and then lower it to 1.35 as in HW set 3.

Choices:

2.68

5.64

4.22

3.75

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