Problem 31-9 Exchange Rate Risk

Suppose your company imports computer motherboards from Singapore. The exchange rate is currently 1.2857 S$/US$. You have just placed an order for 26,000 motherboards at a cost to you of 231.50 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $196 each.

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.)

Profit at the current exchange rate

$

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.)

Profit if the exchange rate up by 10%

$

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.)

Profit if the exchange rate down by 10%

$

What is the break-even exchange rate? (Round your answer to 4 decimal places, e.g., 32.1616.)

Break-even exchange rate

S$ /$

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.)

Percentage change

% (Click to select)FallRise