1.Use the following information to answer the next three questions:

Antwerp Corp. of the United States exports electronic devices to Argentina. Sales are currently 8,000,000 units per year at the current peso equivalent of $34 each. The spot Peso/dollar exchange rate is $0.3864/peso but the dollar is expected to appreciate by 8% in a few days and then stay constant for the coming two years. Antwerp Corp. decides to maintain the same peso price. Given this choice, Antwerp expects a growth rate in unit sales of 25% per year for the coming two years.

Direct costs per unit are constant at $27.

Antwerp weighted average cost of capital is 15%.

Calculate the value of the peso after the 8% appreciation.

a.$ 0.3555/peso

b.$ 0.3578/peso

c.$ 0.4200/peso

d.$ 0.4173/peso

2.What would be the dollar price given that Antwerp had decided to keep the same peso price?

a.$31.28

b.$36.96

c.$31.48

d.$36.72

3.If the correct answer to question 23 is $0.3523/peso. what would be Antwerp's dollar gross profits in year two?

a.$49.99 million

b.$310 million

c.$372 million

d.$387.5 million