complete part A and B

complete part A and B

Hurte-Paroxysm Products, Inc. (A). Hurte-Paroxysm Products, Inc. (HP) of the Unied Stales, exponts computer printers to Brazil, whose curtency, the rea's (BerL) has been trading at BRL.3.40 = USD 1,00. Exports to Brazl are currently 40,000 printers per year at the teais equivalont of $200 each. A rumor oxists that hese rais will be deralued aguinst the ocilar ta BRL4.10 within two weeks by the Erazilian government. Should the devaluation take ploce, the reais is expected to remain unchanged for ancther decade. Aceepting this forecast as given, HP facos a prioing decision that must be made before any actual devaluation: HP myy either (1) maintain the same reais prico and, in elect, sel for fewor dollars, in which case Brazihan volume will nol change, or (2) maintain the same dolar price, ralse the reals price in Brazil to compersate for the devaruation, and experance a 2015 drop in volume: Diect costs in the United States are 60% of the U.S. sales price. a. What would be the short-run (one-year) impact of each pricing strategy? b. Which do you recommend? a. If HP maintains the same reais price and same urit volame, whit will be the from's goss protts? (Round to the nearest dollar.) Hurte-Paroxysm Products, tne. (A). Hurto-Paroxysm Products, lnc. (HP) of the United States, oxports computer printers to Brazil, whose currency, the neais (aRL) has been trading at two weeks by the Brazilan govemment. Should the devaluation tako place, the reais is expected to remain unchanged for another decade. Accegting this forecast as given, HP taces a pricing docision that must be made before any actual devaluation: HP may ecther (T) maintain the same reais price and, in elfect, sell for fower dolars, in which case Braziliah volume will not change, or (2) maintain the same dollar price, ratse the thais prico in Brazil to compensate for the devaluation, and experionce a 20\%s droe in volume. Dired conts in the Urited Stites are 60% of the U.S. sales price. a. What would be the short ran (one year) impond of each priding strategy? b. Which do you recommond? I. HP maintaint the same reais price and same unit volume, what will be the frrmin gross peofits? TRRound to the nearez dollar.)