I need your help in preparing a study to localize our luxury product Alpha to the country of Rica. Rica's currency (abbreviated RIC) has weakened considerably in the past year against the U.S. dollar (USD) causing the profit translation of our revenue from our Rica sold units to degrade significantly. The leadership team has requested that we find a way to mitigate this currency volatility. One way we can do this is better match the currency of our costs to the currency of our revenue. As our sales in Rica constitute a larger mix of the total global sales of our multi-vehicle portfolio going forward, localizing Alpha and creating some RIC cost exposure may help balance our overall currency portfolio and minimize the profit impact of volatile currency movements.

See the note below for additional texture and key financial data that will be required for the analysis.

Your analysis should provide a profit impact sensitivity analysis using the range of RIC:USD provided below.

Here are my guidelines / tips for you:

1. Your profit impact analysis should focus on a decision analysis for the localization alternative. The U.S. sourcing location is in our present Business Plan. Provide an incremental view to our Business Plan shown in $ Millions.

2. The localization alternative will have no impact on our sales revenue, so all the data that I have sent over is cost related. There is no need to include revenue in the incremental decision analysis.

3. Given the tight timing on this request, assume a One Period Analysis for this study (i.e., calculate the profit impact for one year only). At a later date, with better data and an aligned cost of capital, we will analyze the entire five-year product cycle.

4. Bryan from the Corporate Economics team suggested that we study a three-point range for RIC:USD (5:1, 6:1, and 7:1).

As you will see, there are trade-offs with the localization alternative. Let me know your recommendation based on the available data. And let me know other risks or concerns (financial and non-financial) that we should communicate to our leadership team.

If you need any more data from my team, just let me know. Thanks for your help on this one.