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only need case 2 table (bottlm table), thanks! Manitowoe Crane (B). Manitowoc Crane (U.S.) exports heavy crane equipment to several Chinese dock facilfies. Sales are
only need case 2 table (bottlm table), thanks!
Manitowoe Crane (B). Manitowoc Crane (U.S.) exports heavy crane equipment to several Chinese dock facilfies. Sales are currently to, 0oo units per year at the yuan equivaient of 524,000 . remain unchanged for at least a decade. Accepting this forecast as given, Maritowoc Crane faces a pricing decision in the face of the impending devaluaton. It may either (1) maintain the same yuan price and in eflect 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 cevaluation, and experience a 10% drop in unt volume. Direct costs are 75% of the U.S. sales prico. Additonaly, financial management belioves that if it maintains the same yuan sales price, volume will increase at 12% por annum through year eighe Dollar costs will not change. At the end of 8 years, Manitowoc's patent expires and it will no longer export to China. After the yuan is devalued to Yuang.20r5, no further devaluations are expected. If Marilowoc Crane raises the yuan price so as to maintain its dollar prico, volume will increase at only 1% per annum throogh year eight, starting from the lower initlal base of 9.000 units. Again, dellar costs will not change, and at the end of eight yoars Manitowoc Crane will stop exporting to China. Manitowoc's woighted average cost of capital is 10%. Chen these conaiderations, what should be Manitowoc's pricing policy? CASE 1 If Manitowoc Crane maintains the same yuan price and in effect sells for fewer dollars, the annual salos price per unit is equal to ( $24,000 YuanB.20/5) - Yuan9. 20.5 = $21,391.3. The diect cost per unit is 75% of the sales, of $24,0000.75=$18,000. Calculate the gross profits for years 1 through 4 in the following table: (Round to the nearest dollar) Calculate the gross profis for years 5 through 8 in the folowing table: (Round to the nearest dollac) If Manilowoc's welghted average cost of capital is 10% s, what is the cumulative present value of the firn's gross margin? (Round to the nearest dollac.) II Manilowoc Crane maintains the same dollar price, raises the yuan price in China to offset the devaluation, and experiences a 10% drop in unit volume, the annual sales price per unit is $24,000. The direct cost per unit is 75% of the salos, or $24,0000.75=$18,000 and the sales volume in year 1 is 10,000(10.10)=9.000. Calculate the growth profts for years 1 through 4 in the following table; (Round to the nearest dollar.) Step by Step Solution
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