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I'm having issues on knowing how to actually start this. International Marketing Incident A: India Currency A conflict has broken out between India and Pakistan
I'm having issues on knowing how to actually start this.
International Marketing Incident A: India Currency A conflict has broken out between India and Pakistan over rising tensions in the Kashmir region. Because of the instability, many investors are moving their money into more stable currencies. This capital flight has caused the Indian Rupee to drop on foreign exchange markets. To further complicate matters, the government of India has been borrowing heavily to finance a possible escalation into war Your group is currently operating in India. As a result of the war, AllStar management is concerned to what extent the Rupee will be devalued. They want to examine two scenarios where the currency drops 5% and 25%. Currently the exchange rate is 46.05 Rupees to Dollars (see Exhibit 1). How would the devaluation of the Rupee affect your contribution in the home currency (S)? How much more sales revenue would be needed in India to maintain your current contribution? Contribution after Marketing in India for the period was 22% of sales (see Exhibit 2). Your goal is to maintain this percentage Exhibit 1: Exchange Rotes Exchange Rates Period 4 HomeDollar Chn.Yuan(CNY) Jpn.YenJPY) Ind.Rupee INR) SKa.Wan(KR) PhilPeso(PHP) ThaiBaht THB) 5.8344 46.0511 7.893 0.5756 1000 39.1742 5.7143 0.4897 26.5521 4.551 0.3319 05766 0.0266 0.6773 13.7118 0.0125 0.0729 12.5 21.72 1.7372 0.08 2.0422 3.0129 0.001 0.0058 0.1489 0.2197 0.0461 1.1755 17344 0.0392 25.53 37.65 0.0377 1.4754 Exhibit 2: India Contribution ofter Morketing Net Contribution Period 4 (in Rupees) Unit Sales Manufacturer Sales Costs Gross Margin 394.9 1,055,686 664,417 391,270 3796 Total Marketing 156,720 1596 Contribution after Marketing 234,550 22% Incident A: India Currency Devaluation Net Contribution Period 4 (in Rupees) Currency Devalues 15% and 25%-How Does That Affect Contribution After Mkting? 15% 25% Unit Sales Manufacturer Sales Costs Gross Margin 394.9 1,055,686 664,417 Contribution after Mkting S000 Change in $ Contribution after Mkting Change in Rupee Contribution after Mkting 37% 391,270 156,720 234,550 Total Marketing 15% Additional Sales Revenue Needed to Maintain Contribution Currency Depreciates 15% Additional Contribution after Mkting Needed in Rupees Additional Manufacturer Sales in Rupee Contribution after Mktin 22% No Change Net Contribution (S000) Unit Sales Manufacturer Sales Costs Gross Margin 394.9 Additional Sales Revenue Needed to Maintain Contribution Currency Depreciates 25% Additional Contribution after Mkting Needed in Rupee Additional Manufacturer Sales in Rupee Total Marketing Contribution after Mktin Ind.Rupee (INR) per 1USD (S) Current Exchange Rate Currency Depreciates Currency Depreciates 46.05 15.00% 25.00%
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