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Need help finding the production cost for year 1-3 and profit for year 1-3. Please show work!! Operating exposure. Copy-Cat, Inc. has signed a deal
Need help finding the production cost for year 1-3 and profit for year 1-3. Please show work!!
Operating exposure. Copy-Cat, Inc. has signed a deal to make vintage Nissan 240-Z sports cars for the next three years. The company will build the cars in Japan and ship them to the United States for sale. The current indirect rate is 114.0137 per dollar. The anticipated inflation rate for parts and labor in Japan is 2.9% over the next three years, and the anticipated overall inflation rate for Japan is 3.9% over the next three years. The expected overall inflation rate in the United States is 4.6% over the next three years. (The stated rates are on an annual basis.) If Copy-Cat plans to sell 600 cars a year at an initial price of $43,000 and the cost of production is 4,056,500, what is the annual profit in dollars for Copy-Cat? Assume it takes one year for production and all sales revenues and production costs occur at the end of the year. Is this profit rising or falling each year? WhyStep by Step Solution
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