Question

suppose your company imports computer motherboards from singapore. the exchange rate is currently 1.5128 s$/us$. you have just placed an order for 29,000 motherboards at a cost to you of 231.25 singapore dollars each. you will pay for the shipment when it arrives in 90 days. you can sell the motherboards for $160 each.calculate your profit if the exchange rates stay the same over the next 90 days.note: do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.calculate your profit if the exchange rate rises by 10 percent over the next 90 days.note: do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.calculate your profit if the exchange rate falls by 10 percent over the next 90 days.note: a negative answer should be indicated by a minus sign. do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.what is the break-even exchange rate?note: do not round intermediate calculations and 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?note: enter your answer as positive value. do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.

Answer 1

To calculate the profit, we need to convert the cost of each motherboard from Singapore dollars to US dollars using the exchange rate. We can then calculate the total cost, total revenue, and profit.

1. If the exchange rates stay the same over the next 90 days:

- Cost per motherboard in US dollars: 231.25 / 1.5128 = $152.96
- Total cost: 29,000 * $152.96 = $4,436,640
- Total revenue: 29,000 * $160 = $4,640,000
- Profit: $4,640,000 - $4,436,640 = $203,360

2. If the exchange rate rises by 10 percent over the next 90 days:

- New exchange rate: 1.5128 * 1.1 = 1.66408
- Cost per motherboard in US dollars: 231.25 / 1.66408 = $138.98
- Total cost: 29,000 * $138.98 = $4,025,420
- Total revenue: 29,000 * $160 = $4,640,000
- Profit: $4,640,000 - $4,025,420 = $614,580

3. If the exchange rate falls by 10 percent over the next 90 days:

- New exchange rate: 1.5128 * 0.9 = 1.36152
- Cost per motherboard in US dollars: 231.25 / 1.36152 = $169.81
- Total cost: 29,000 * $169.81 = $4,926,490
- Total revenue: 29,000 * $160 = $4,640,000
- Profit: $4,640,000 - $4,926,490 = -$286,490 (negative profit)

4. To find the break-even exchange rate, we can set the total cost equal to the total revenue and solve for the exchange rate:

29,000 * (231.25 / X) = 29,000 * 160

Simplifying and solving for X, we get:

X = 231.25 / 160 = 1.4453

Therefore, the break-even exchange rate is 1.4453 Singapore dollars per US dollar.