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Dell is selling 30,000 units in Europe at an average price of 1,500 per unit. Both the spot and forward exchange rates are $1.20/. The
Dell is selling 30,000 units in Europe at an average price of 1,500 per unit. Both the spot and forward exchange rates are $1.20/. The cost of each unit in dollars is $1,300 per unit. The elasticity of demand for Dell computers in Europe is = 1.5. Reconsider a depreciation of Euro( relative to US Dollar) from $1.20/euro to $1.08/euro. Now assume passthrough = 0.8 What is the delta for Dell's dollar profit in $? a)$12,028,410 b)$11,869,440 c)$11,137,417 d)$6,397,440
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