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Suppose your company imports cars from Germany. The exchange rate is currently 10.05 / ....

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Finance

Suppose your company imports cars from Germany. The exchange rate is currently 10.05 / . You have just placed an order for 50 cars at a cost to you of 100,000 each. You will pay for the shipment when it arrives in 50 days. You can sell the cars for 1,100,000 each.

a)What is your profit at Turkish Lira?

b)What is your profit if the exchange rate goes up to 10.50 / ?

c)What is your profit if the exchange rate goes down 9.50 / ?

d)What is the break-even exchange rate?

e)How can you hedge your company against exchange rate risks?

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