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Please fill out all values in the chart. I will leave a thumbs up if correct! Hurte-Paroxysm Preducts, Inc. (B). Hurto-Paroxysm Products, Inc. (HP) of
Please fill out all values in the chart. I will leave a thumbs up if correct!
Hurte-Paroxysm Preducts, Inc. (B). Hurto-Paroxysm Products, Inc. (HP) of the Unied States, exports conputer printers to Brazil, whose currency, the reas (BRL) has been trading at BRL3 00ruSO1.00. Exports it Braxi are currently 55.000 printers per year at the reais equivalent of $240 each. A numor exists that the reais wil be devalued against the dolar to RRL.370 within two weeks by the Brazlian governenent. Should the devaluation take place, the reais is expected to remain unchanged for another decade Accepting this focecast as given, HP faces a priong decision that must be made belore any actual devaluaton: AP may either (1) maintain the same reais price and, in effect sell for lewer dollars, in which case Brazilan volume will not change, or (2) maintain the same dollat price, taise the reais price in Brazi lo compensate for the devaluation, and experience a 20\%, drop in volume. Direct costs in the United States are cos of the U.S. sales price. HP also beleves that if it maintains the same price in Brablian reais as a permanent policy, volume will inerease at 11% per annum though yar sic, costs will not change. As the end of six years, HP's potent expires and at wal no longer export to Brazi. Ather the reais is derolued to BRL.3.70 = USD .00, no further devaluaton is expected. If HP rases the price in reas so as to mintain its dolar price. volume Wil increase at only 3% per annum through year six, starting from the lower intiol base of 44,000 unit: Again, dollar costs wil not change. and at the end of CASE1 unit is 60% of the sales, or $2400.60=$144. Calculate the gross profits for years 1 through 6 in the following table: (Round to the noarost dollar.) Step by Step Solution
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