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Bulloch Equipment of Savannah, Georgia purchases several parts from manufacturers in Japan. Their main product, the forklift FL17, costs currently $25,000 (cost of production). The
Bulloch Equipment of Savannah, Georgia purchases several parts from manufacturers in Japan. Their main product, the forklift FL17, costs currently $25,000 (cost of production). The company expects that the cost of the electrical parts that goes into the forklift and are imported from Japan will be impacted by the potential appreciation of the Japanese yen. Assume that the electrical parts make up 20% of the production cost of the forklift. How would a 10% appreciation of the yen against the dollar impact total cost of the forklift? Assume a current exchange rate (before depreciation) of Yen 110/$. Forklift cost goes up by $500 None of the answers is correct Forklift cost goes up by $777.78 Forklift cost goes down by $545.46 Forklift cost goes up by $555.56
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