Question
Jaguar has full manufacturing costs of their S-type sedan of 22,803. They sell the S-type in the UK with a 20% markup for a price
Jaguar has full manufacturing costs of their S-type sedan of 22,803. They sell the S-type in the UK with a 20% markup for a price of 27,363. Today these cars are available in the US for $55,000 which is the UK price multiplied by the current exchange rate of $2.01/. Jaguar has committed to keeping the US price at $55,000 for the next six months. If the UK pound appreciates against the USD to an exchange rate of $2.15/, and Jaguar has not hedged against currency changes, what is the percentage markup the company will realize given the new exchange rate?
A. 20.0% B. 15.3% C. 12.2% D. 7.2%
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