1.- If Newport Lifts maintains the same yuan price, what is the US dollar price of the crane equipment per unit?

2.-What is the gross profit in dollars if we assume the first scenario, i.e., the same yuan price?

3.-If we assume the second scenario, i.e., the same dollar price and 15% drop in the sales volume, what is the gross profit in dollars?

Newport Lifts (USA) exports heavy crane equipment to several Chinese dock facilities. Sales are currently 1,000 units per year at the yuan equivalent of $20,000 each. The Chinese yuan (renminbi) has been trading at Yuan6.75/$, but a Hong Kong advisory service predicts the renminbi will drop in value next week to Yuan7.20/S, after which it will remain unchanged for at least a decade. Accepting this forecast as given, Newport Lifts faces a pricing decision in the face of the impending devaluation. It may either (1) maintain the same yuan price and in effect sell for fewer dollars, in which case Chinese volume will not change; or (2) maintain the same dollar price, raise the yuan price in China to offset the devaluation, and experience a 15% drop in unit volume. Direct costs are 70% of the US sales price