Ganado Inc., the Canadian company, makes versatile staplers for sale in Eurozone countries. Ganado charges C$$6$ per stapler, or $4$ euros $($or E$4)$ at the C$$1\mathrm{.}50/$E spot rate. At this price, Ganado expects annual sales of $20,000$ staplers. Variable costs are C$$3$ per stapler in Canada. Ganado's tax rate is $30\%$ in Canada.

Required

a$)$ Calculate Ganado's annual net income in Canadian dollars for selling $20,000$ staplers.

Ganado is considering its price response to a $20\%$ euro depreciation.

b$)$ What will be the new exchange rate between the Canadian dollar and the euro? Relatively, how much will the Canadian dollar appreciate against the euro? Calculate Ganado's annual net income in Canadian dollars assuming it maintains the E$4$ euro price and sales volume in the Eurozone does not change.

c$)$ Calculate Ganado's annual net income in Canadian dollars assuming Ganado maintains the C$$6$ price $($or$,$ a $???$ new euro price at the expected spot exchange rate$)$ and the Eurozone sales volume falls by $50\%.$ What is Ganado's optimal pricing strategy if demand is price elastic in this way $($that is$,$ the increase in price leads to a substantial decline in demand$)?($Hint: compare the net income in c$)$ with that in b$))$

d$)$ Calculate Ganado's annual net income in Canadian dollars assuming Ganado maintains the C$$6$ price $($or$,$ a new $???$ euro price$)$ and the Eurozone sales volume falls by $10\%.$ What is Ganado's optimal pricing strategy if demand is price inelastic in this way $($that is$,$ the increase in price leads to a less significant decline in demand$)?($Hint: compare the net income in d$)$ with that in b$))$