Question 7 4 poin Caterpillar currently exports 11,700 tractors to China at the yuan equivalent of USD 25,000 each. The current exchange rate is CNYS/USD but is forecasted to be CNY9/USD in the near future. The direct costs are 75% of the USD sales price. If Caterpillar uses 100% pass-through pricing strategy, what will be its before tax profit when the yuan declines? USD 61,875,000 USD 73,125,000 USD 67,500,000 USD 54,000,000 USD 41,666,666 Question 8 4 points Save An: The centralization of intra-firm currency transactions to reduce operating exposure is carried out b multinational firms through specialized subsidieries known as Reinvocing centers Currency switch loan centers O Parallel loan centers Natural hedge loan centers o Forward loan centers Arnold International Inc. (AI), headquartered in California, just bought electronic equipment from a supplier in Japan for JPY 100,000,000 with the payment due in three months. The current spot rate is JPY118/USD and the 3-month forward rate is JPY118/USD. Al can hedge the payment of JPY 100,000,000 by entering into a forward contract to Buy JPY 100,000,000 and deliver (sell) USD 869,565.22 in 3 months Deliver (sell) JPY 100,000,000 and buy USD 847,457.63 in 3 months Buy JPY 100,000,000 and deliver (sell) USD 862,068.97 in 3 months Buy JPY 100,000,000 and deliver (sell) USD 847,457.63 in 3 months Deliver (sell) JPY 100,000,000 and buy USD 862,068.97 in 3 months