RET (Pty) Ltd, a South African company, is seeking an international market. It decides to sell through
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RET (Pty) Ltd, a South African company, is seeking an international market. It decides to sell through the internet and prices its goods in rand. They argue that pricing goods in foreign currency would significantly affect their profits as their margin is about 15 per cent.
a You want to put some numbers to this argument. Search for 'Bank of England Exchange rates' online and calculate the percentage difference between the highest and lowest exchange rate of the rand to the UK pound (as a percentage of the lowest). Does the data support their argument?
b What are the potential disadvantages of pricing in rand?
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