Suppose your company imports computer motherboards from Singapore. The exchange rate is given in Figure 31.1. You

Question:

Suppose your company imports computer motherboards from Singapore.

The exchange rate is given in Figure 31.1. You have just placed an order for 30,000 motherboards at a cost to you of 146.50 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $120 each. Calculate your profit if the exchange rate goes up or down by 10 percent over the next 90 days. What is the break-even exchange rate? What percentage rise or fall does this represent in terms of the Singapore dollar versus the U.S. dollar?

Figure 31.1 Exchange Rate Quotations USD Equivalent Country/Currency Americas Argentina peso Brazil real