Part 1 of 7 > Points: 0 of 2 Manitowoc Crane (B). Manitowoc Crane (U.S.) exports heavy crane equipment to several Chinese dock facilities. Sales are currently 10,000 units per year at the yuan equivalent of $24,000 each. The Chinese yuan (renminbi) has been trading at Yuan8.20/$, but a Hong Kong advisory service predicts the renminbi will drop in value next week to Yuan9.20/$, after which it will remain unchanged for at least a decade. Accepting this forecast as given, Manitowoc Crane faces a pricing decision in the face of the impending devaluation. It may either (1) maintain the same yuan price and in effect sell for fewer dollars, in which case Chinese volume will not change; or (2) maintain the same dollar price, raise the yuan price in China to offset the devaluation, and experience a 10% drop in unit volume. Direct costs are 75% of the U.S. sales price 1 Additionally, financial management believes that if it maintains the same yuan sales price, volume will increase at 12% per annum through year eight. Dollar costs will not change. At the end of 8 years, Manitowoc's patent expires and it will no longer export to China. After the yuan is devalued to Yuan9.20/$, no further devaluations are expected. If Manitowoc Crane raises the vuan price so as to maintain its dollar price volume will increase at only 1% per annum through vear eight starting from the lower initial base of 9 000 units Again dollar Year 1 Case 1 Year 2 Year 4 Year 3 11,200 12,544 14,049 10.000 Sales volume (units) Sales price per unit $ 21,391.3 21,391.3 $ 69 21,391.3 $ 21,391.3 $ Total sales revenue Manitowoc Crane (B). Manitowoc Crano (US.) exports heavy crane equipatnant to several Chinose dock facilities Sales are currently 10 000 units per year at the yuan equivalent of $24.000 each. The Chinese yuan (renminbi) has been trading at Yuan. 20/$, but a llong Kung advisory service predicts the renminbi will drop in value next week to Yuan9.20/S, after which it will remain unchanged for at least a decade. Accepting this forecast as given, Manitowoc Crane feces a pricing decision in the face of the impending devaluation It may either (1) maitituin the same yuan price and in effect sell for lewer dollars, in which caso 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 US salos price Additionally, financial management believes that if it maintains the same yuan sales price, volume will increase at 12% per annum through yoar Right 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 Yuun9.20/$, no further devaluations are expected If Manitowoc Crane raises the yuan price so as to maintain ils dollar price, volume will increase at only 1% per annum through year eight, starting from the lower initial base of 9,000 units. Again, dollar costs will not change, and at the end of eight years Manitowoc Crane will stop exporting to China Manitowoc's weighted average cost of capital is 10%. Given these considerations, what should be Manitowoc's pricing policy? Salos price per unit $ 21 391 3 $. 21 3913 5 21,3913 S 21,391 3 Total sales ravenue Direct cost per unit $ 18.000 $ 10.000 S 18.000 $ 18.000 Total direct costs Gross profits Part 1 of 7 > Points: 0 of 2 Manitowoc Crane (B). Manitowoc Crane (U.S.) exports heavy crane equipment to several Chinese dock facilities. Sales are currently 10,000 units per year at the yuan equivalent of $24,000 each. The Chinese yuan (renminbi) has been trading at Yuan8.20/$, but a Hong Kong advisory service predicts the renminbi will drop in value next week to Yuan9.20/$, after which it will remain unchanged for at least a decade. Accepting this forecast as given, Manitowoc Crane faces a pricing decision in the face of the impending devaluation. It may either (1) maintain the same yuan price and in effect sell for fewer dollars, in which case Chinese volume will not change; or (2) maintain the same dollar price, raise the yuan price in China to offset the devaluation, and experience a 10% drop in unit volume. Direct costs are 75% of the U.S. sales price 1 Additionally, financial management believes that if it maintains the same yuan sales price, volume will increase at 12% per annum through year eight. Dollar costs will not change. At the end of 8 years, Manitowoc's patent expires and it will no longer export to China. After the yuan is devalued to Yuan9.20/$, no further devaluations are expected. If Manitowoc Crane raises the vuan price so as to maintain its dollar price volume will increase at only 1% per annum through vear eight starting from the lower initial base of 9 000 units Again dollar Year 1 Case 1 Year 2 Year 4 Year 3 11,200 12,544 14,049 10.000 Sales volume (units) Sales price per unit $ 21,391.3 21,391.3 $ 69 21,391.3 $ 21,391.3 $ Total sales revenue Manitowoc Crane (B). Manitowoc Crano (US.) exports heavy crane equipatnant to several Chinose dock facilities Sales are currently 10 000 units per year at the yuan equivalent of $24.000 each. The Chinese yuan (renminbi) has been trading at Yuan. 20/$, but a llong Kung advisory service predicts the renminbi will drop in value next week to Yuan9.20/S, after which it will remain unchanged for at least a decade. Accepting this forecast as given, Manitowoc Crane feces a pricing decision in the face of the impending devaluation It may either (1) maitituin the same yuan price and in effect sell for lewer dollars, in which caso 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 US salos price Additionally, financial management believes that if it maintains the same yuan sales price, volume will increase at 12% per annum through yoar Right 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 Yuun9.20/$, no further devaluations are expected If Manitowoc Crane raises the yuan price so as to maintain ils dollar price, volume will increase at only 1% per annum through year eight, starting from the lower initial base of 9,000 units. Again, dollar costs will not change, and at the end of eight years Manitowoc Crane will stop exporting to China Manitowoc's weighted average cost of capital is 10%. Given these considerations, what should be Manitowoc's pricing policy? Salos price per unit $ 21 391 3 $. 21 3913 5 21,3913 S 21,391 3 Total sales ravenue Direct cost per unit $ 18.000 $ 10.000 S 18.000 $ 18.000 Total direct costs Gross profits