Jupiter Engine Companyhas recently negotiated contracts to sell 1 of its X-model engines to a customer in England and 1 of its Z-model engines to a customer in Germany.Jupiter will be paid in 3 months in the currency of its customers.

The engine selling prices are:

X-model200,000 British pounds

Z-model265,500 Euros

Jupiter's costs to produce each engine in US dollars:

X-model$225,000

Z-model$270,000

Today's exchange rates:

GBpound/US$1.20

US$ /Euro0.90

1.Calculate Jupiter's profits from each engine sale, based on today's exchange rates.

(Profit =Price in US dollars -costs in US dollars)

2.Jupiter will not actually be paid for 3 months.If they choose not to hedge themselves against currency fluctuations by locking in today's rate, they will either make less or more profit based on changes in the exchange rate.

Would they prefer to see the US dollar get STRONGER or WEAKER during this period? (circle correct choice)

Would they prefer to see the Euro get STRONGER or WEAKER during this period? (circle correct choice)