Manitowoc Crane (A). Manitowoc Crane (U.S.) exports heavy crane equipment to several Chinese dock facilities. Sales are currently 16,000 units per year at the yuan equivalent of $25,000 each. The Chinese yuan (renminbi) has been trading at Yuan 8. 40/5, but a Hong Kong advisory service predicts the renminbi will drop in value next week to Yuan 9.10/5, after which it will remain unchanged for at least a decade. Accepting this forecast as given, Manitowoc Crane faces a pricing decision in the face of the impending devaluation. It may either (1) maintain the same yuan price and in effect sell for fewer dollars, in which case Chinese volume will not change: or (2) maintain the same dollar price, raise the yuan price in China to offset the devaluation, and experience a 10% drop in unit volume. Direct costs are 75% of the U.S. sales price. a. What would be the short-run (one-year) impact of each pricing strategy? b. Which do you recommend? a. W Manitowoc Crane maintains the same yuan price and same unit volume, what will be the firm's gross profits? $ (Round to the nearest dollar.) If Manitowoc Crane maintains the same dollar price, raises the yuan price in China to offset the devaluation, and experiences a 10% drop in unit volume, what will be the firm's gross profits? (Round to the nearest dollar) b. Which do you recommend? (Select from the drop down menu.) is better because it yields higher profits. Study Manitowoc Crane (A), Markowoc Crane (US) exports heavy crane equipment to several Chinese dock facilities Sales are currently 16,000 units per year at the yuan equivalent of 525.000 each The Chinese yuan (renminbi) has been trading of Yuan 40/5, but a Hong Kong advisory service predicts the renminbi will drop in value next week to Yang 10/3, after which it will remai Result unchanged for most a decade Accepting this forecast as glven, Manitowoc Crane faces a pricing decision in the face of the impending devaluation. It may other (1) maintain the same yan price and in elect sell for fewer dollars, in which case Chinese volume will not change or (2) maintain the same dollar price, raise the yuan price in China to offer the devaluation, and Pearse experience a 10% drop in un volume Drect costs are 75% of the US, sales price a. What would be the short run (one year) impact of each pricing strategy? Multi b. Which do you recommend? a. 1 Mariowoc Crane maintains the same yuan price and same un volume, what will be the firm's gross profits? Finant (Pound to the nearest dollar) Chape Mariowoc Crane maintains the same dollar price raise the yuan price in China to the devaluation, and experiences a 10% drop in un volume, what will be the firm's gross profits? DUE DUE AI DUE ATI Com S o und to the nearest dollar) b. Which do you recommend? (Select from the drop down menu DUE ATT is better because it yields higher profits DUE ATT
