KT Televisions, a US firm, has a Chinese subsidiary that manufactures and sells TVs in China. i. Main input is priced in USD (USD210/unit) ii. All other costs are in CNY (Fixed cost=CNY4M, Variable cost= CNY560/unit). iii. Depreciation = CNY1.5M iv. SO = CNY6.26/USD v. Expects to sell 1,500 TVs this year at CNY2,500 each. vi. Tax rate=30%; assuming tax credits are available for immediate use if losses occur Question: If the spot rate increases to CNY7.5/USD, KT would like to maximize his profits (operating cash flows in dollars) by changing his selling price and variable cost in CNY (not including the main input) but his action is restricted by the following constraints: i. Selling price cannot increase by more than 20%; ii. Variable unit cost in CNY (not including the main input) can only be between 90% and 110% of the original cost; iii. Unit sold will reduce at the same rate of selling price increases. For example, unit sold will reduce by 10% if selling price increases by 10%. Please fill out the values of the following three variables that maximise KT's profits (operating cash flows in dollars). New Selling Price per unit New Variable Cost in CNY (Not including the main input) per unit New Unit Sold KT Televisions, a US firm, has a Chinese subsidiary that manufactures and sells TVs in China. i. Main input is priced in USD (USD210/unit) ii. All other costs are in CNY (Fixed cost=CNY4M, Variable cost= CNY560/unit). iii. Depreciation = CNY1.5M iv. SO = CNY6.26/USD v. Expects to sell 1,500 TVs this year at CNY2,500 each. vi. Tax rate=30%; assuming tax credits are available for immediate use if losses occur Question: If the spot rate increases to CNY7.5/USD, KT would like to maximize his profits (operating cash flows in dollars) by changing his selling price and variable cost in CNY (not including the main input) but his action is restricted by the following constraints: i. Selling price cannot increase by more than 20%; ii. Variable unit cost in CNY (not including the main input) can only be between 90% and 110% of the original cost; iii. Unit sold will reduce at the same rate of selling price increases. For example, unit sold will reduce by 10% if selling price increases by 10%. Please fill out the values of the following three variables that maximise KT's profits (operating cash flows in dollars). New Selling Price per unit New Variable Cost in CNY (Not including the main input) per unit New Unit Sold