suppose your company imports computer motherboards from singapore. the exchange rate is currently 1.2836S$/US$. you have just...

Free

70.2K

Verified Solution

Question

Finance

suppose your company imports computer motherboards fromsingapore. the exchange rate is currently 1.2836S$/US$. you havejust placed an order for 24,000 motherboards at a cost to you of236 singapore dollars each. you will pay for the shipment when itarrives in 90 days. you can sell the motherboards for $195 each.what is your profit at the current exchange rate? what is yourprofit if the exchange rate goes up by 10 percent over the next 90days? what is your profit if the exchange rate goes down by 10percent over the next 90 days? what is the break even exchangerate? what percentage rise or fall does this represent in terms ofsingapore dollar versus the us dollar?

Answer & Explanation Solved by verified expert

4.5 Ratings (980 Votes)


A	Cost per unit in Singapore dollar	236
B	Number of units imported	24,000
C=A*B	Total Cost in Singapore Dollar	5664000
D	Exchange Rate S$/US$	1.2836
E=C/D	Total Cost in US dollar	4,412,589.59
F	Selling per unit in US dollar	195
G=F*B	Total Selling price in US dollar	4,680,000
H=G-E	Profit in current exchange rate (USD)	$267,410.41

	If Exchange Rate goes up by 10%
I	Exchange Rate S$/US$	1.41196	(1.1*1.2836)
J=C/I	Total Cost in US dollar	4011445.083
K=G-J	Profit with INCREASED exchange rate (USD)	$668,554.92

	If Exchange Rate goes down by 10%
L	Exchange Rate S$/US$	1.15524	(0.9*1.2836)
M=C/L	Total Cost in US dollar	4902877.32
N=G-M	Profit/(Loss) with DECREASED exchange rate	(222,877.32)	USD

	Break even Exchange Rate X S$=1USD
	TotalCost in US dollar=5664000/X
	Total Selling Price in US dollar	4,680,000
	(5664000/X)=4680000
	X=5664000/4680000=	1.21026
	1.2103S$/US$

	Percentage of fall:
	(1.2836-1.2103)/1.2836=	5.71%

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

suppose your company imports computer motherboards fromsingapore. the exchange rate is currently 1.2836S$/US$. you havejust placed an order for 24,000 motherboards at a cost to you of236 singapore dollars each. you will pay for the shipment when itarrives in 90 days. you can sell the motherboards for $195 each.what is your profit at the current exchange rate? what is yourprofit if the exchange rate goes up by 10 percent over the next 90days? what is your profit if the exchange rate goes down by 10percent over the next 90 days? what is the break even exchangerate? what percentage rise or fall does this represent in terms ofsingapore dollar versus the us dollar?