James would like to establish a price for the Japanese market. He does not have any idea what price to charge and he is worried about the changing CDN/Yen.

1. What should JBrewies Japanese price be (show the calculation using FX rate above) if he wants to make $25 CAD per case profit margin (costs are 15$ per case)? (1 mark)

2. If the exchange rate changes to 1CAD:75.121 JPY should he change his price per case? (1 mark)

3. What are two exchange rate risks James faces given the current world economic environment if he operates a wholly owned subsidiary? (1 mark)

4. If he wants to protect the company against these risks and there is an expected exchange rate shift what should he consider doing? (1 mark)