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Measuring and Managing Operating Exposure Ayota Car Company produces a car that sells in Japan for 1.8 million. On September 1, the beginning of the

Measuring and Managing Operating Exposure

Ayota Car Company produces a car that sells in Japan for 1.8 million. On September 1, the beginning of the model year, the exchange rate is 150:$1. Consequently, Ayota sets the U.S. sticker price at $22,000.

Would Ayota be helped or hurt by dollar depreciation? Suppose by October 1, the exchange rate has dropped to 135:$1. How much Yen will Ayota receive per sale?

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