Question
Ranbaxy, an India-based pharmaceutical firm, has continuing problems with its cholesterol reduction product's price in one of its rapidly growing markets, Brazil. All product is
Ranbaxy, an India-based pharmaceutical firm, has continuing problems with its cholesterol reduction product's price in one of its rapidly growing markets, Brazil. All product is produced in India, with costs and pricing initially stated in Indian rupees (Rps 21,100), but converted to Brazilian reais (R$891) for distribution and sale in Brazil. In 2009, the unit volume was priced at , with a Brazilian real price set at . But in 2010, the real appreciated in value versus the rupee, averaging Rps25.68/R$ . In order to preserve the real price and product profit margin in rupees, what should the new rupee price be set at?
First, the implied spot exchange rate for the previous year, 2009 must be found.
The implied spot exchange rate for the previous year, 2009 is Rps enter your response here/R$.
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