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Answer all questions Yohe Telecommunications is a multinational corporation that produces and distributes telecommunications technology. Although its corporate headquarters are located in Maitland, Florida, Yohe
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Yohe Telecommunications is a multinational corporation that produces and distributes telecommunications technology. Although its corporate headquarters are located in Maitland, Florida, Yohe usually buys its raw materials in several different foreign countries using several different foreign currencies. The matter is further complicated because Yohe often sells its products in other foreign countries. One product in particular, the SY-20 radio transmitter, draws Component X, Component Y, and Component Z (its principal components) from Switzerland, France, and the United Kingdom, respectively. Specifically, Component X costs 160 Swiss francs, Component Y costs 15 euros, and Component Z costs 105 British pounds. The largest market for the SY-20 is Japan, where the product sells for 52,500 Japanese yen. Naturally, Yohe is intimately concerned with economic conditions that could adversely affect dollar exchange rates. Note: Column 2 equals 1.0 divided by column 1 . However, rounding differences do occur. Source: Adapted from The Wall Street Journal (wsj.com), October 21, 2020. Note: Column 1 shows how many units of each foreign currency a U.S. dollar woula Duy, column snows Note: Column I shows how many units of each toreign currency a U.S. dollar would buy, column 2 shows how many units a franc would buy, and so on for the other columns. Source: Adapted from data provided in Table Exchange Rates for October 21, 2020. Spot and Forward Exchange Rates (Number of Units of Foreign Currency per U.S. Dollar): Wednesday, October 21, 2020 The data has been collected in the Microsoft Excel file below. Download the spreadsheet and perform the required analysis to answer the questions below. Do not round intermediate calculations. Download spreadsheet Multinational Financial Management-e99e49.xlsx a. How much in dollars does it cost Yohe to produce the SY-20? Round your answer to the nearest cent. $ What is the dollar sale price of the SY-20? Round your answer to the nearest cent. $ b. What is the dollar profit that Yohe makes on the sale of the SY-20? Round your answer to the nearest cent. $ c. If the U.S. dollar was to weaken by 11% against all foreign currencies, what would be the dollar and percentage profits for the 5Y20 ? Round your answer for the dollar profit to the nearest cent and for the percentage profit to two decimal places. Dollar profit: \$ Percentage profit: % d. If the U.S. dollar was to weaken by 11% only against the Japanese yen and remained constant relative to all other foreign currencies, what would be the dollar and percentage profits for the SY-20? Round your answer for the dollar profit to the nearest cent and for the percentage profit to two decimal places. Dollar profit: $ Percentage profit: % e. Using the 180-day forward exchange information, calculate the return on 1-year securities in Switzerland assuming the rate of return on 1 -year securities in the United States is 5.0%. Assume that there are 360 days in a year. Round your answer to two decimal places. % Percentage profit: % d. If the U.S. dollar was to weaken by 11% only against the Japanese yen and remained constant relative to all other foreign currencies, what would be the dollar and percentage profits for the SY-20? Round your answer for the dollar profit to the nearest cent and for the percentage profit to two decimal places. Dollar profit: \$ Percentage profit: % e. Using the 180-day forward exchange information, calculate theweturn on 1-year securities in Switzerland assuming the rate of return on 1 -year securities in the United States is 5.0%. Assume that there are 360 days in a year. Round your answer to two decimal places. % f. Assuming that purchasing power parity (PPP) holds, what would be the sale price of the SY-20 if it was sold in the United Kingdom rather than Japan? Round your answer to the nearest pennyStep by Step Solution
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