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Problem 3 1 - 9 Exchange Rate Risk 1 . 2 5 Suppose your company imports computer motherboards from Singapore. The exchange points rate is

Problem 31-9 Exchange Rate Risk
1.25 Suppose your company imports computer motherboards from Singapore. The exchange
points
rate is currently 1.2746 S $/US$. You have just placed an order for 26,000 motherboards
at a cost to you of 235.00 Singapore dollars each. You will pay for the shipment when it
arrives in 90 days. You can sell the motherboards for $198 each.
a. What is your profit at the current exchange rate? (Do not round intermediate
calculations and round your answer to 2 decimal places, e.g.,32.16.)
b. What is your profit if the exchange rate goes up by 10 percent? (Do not round
intermediate calculations and round your answer to 2 decimal places, e.g.,32.16.)
c. What is your profit if the exchange rate goes down by 10 percent? (Do not round
intermediate calculations and round your answer to 2 decimal places, e.g.,32.16. A
negative answer should be indicated by a minus sign.)
d. What is the break-even exchange rate? (Round your answer to 4 decimal places,
e.g.,32.1616.)
e. What percentage rise or fall does this represent in terms of the Singapore dollar
versus the U.S. dollar? (Input the value as a positive number. Enter your answer as a
percent rounded to 2 decimal places, e.g.,32.16.)
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