Exchange Rate Risk 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 141.30 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $125 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?