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Measuring Operating Exposure: Ganado Germany Case 2 : Volume Increases Other Variables Remain Constant Assume that, following the depreciation in the euro, sales within Europe
Measuring Operating Exposure: Ganado Germany Case : Volume IncreasesOther Variables Remain Constant Assume that, following the depreciation in the euro, sales within Europe increase by to units all other variables remain constantThe depreciation has now made Germanmade telecom components more competitive with imports Additionally export volume increases because Germanmade components are now cheaper in countries whose currencies have not weakened The sales price is kept constant in euro terms because management of Ganado Germany has not observed any change in local German operating costs and because it sees an opportunity to increase market share Ganado Germany's net income rises to and operating cash flows the first year rise to after a onetime increase in net working capital of Operating cash flow is per year for the following four years The present value of Ganado Germany has risen by $ over baseline to $tableAssumptionsSales volume units
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