As a U.S.-based MNC, you export widgets to the United Kingdom and you currently sell them for British pounds at the equivalent of $38 per unit. The current spot rate of the pound in terms of the dollar is $1.2460/. Your current sales are 1,200,000 units per year.

In response to changes some macroeconomic conditions in the U.K. you expect the pound to depreciate by 10% in the coming few days, and you are considering to respond to that. In preparation for this change, you need to find calculate the following:

1. At what pound price are you currently selling the widgets?
2. What would be the price of the pound in terms of the dollar after the 10% depreciation in the pound?
3. If you want to keep the same dollar price, at what pound price do you need to sell the widgets after the pound depreciation?
4. If you want to keep the same pound price, how many dollars would you be receiving for the sale of each widget?
5. If you keep the same dollar price, you will lose 7% per year in widget sales to your competition. How much would be your total revenues at the end of year six?