Question
Please help with the below finance problem. Thank you! Harrison Equipment ofDenver, Colorado, purchases all of its hydraulic tubing from manufacturers in mainland China. The
Please help with the below finance problem. Thank you!
Harrison Equipment ofDenver, Colorado, purchases all of its hydraulic tubing from manufacturers in mainland China. The company has recently completed acorporate-wide initiative in sixsigma/lean manufacturing. Completed oil field hydraulic system costs were reduced 3.5% over aone-year period, from $881,000 to $850,165. The company is now worried that all of the hydraulic tubing that goes into the systems(making up 22% of their totalcosts) will be hit by the potential revaluation of the Chinese yuanif some in Washington get their way. How would a 11.8% revaluation of the yuan against the dollar impact total systemcosts?
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