Specialty Filters of the US exports special filters to Thailand.It usually exports 50,000 filters at $ 200 each.The current spot rate is USD/THB 30.76, but
Specialty Filters of the US exports special filters to Thailand.It usually exports 50,000 filters at $ 200 each.The current spot rate is USD/THB 30.76, but a strong rumor exists that the baht is about to devalue to THB 33.00/$.Assuming the rumor is correct, Specialty Filters must decide to: (1) maintain the baht price (with no volume change), (2) maintain the dollar price with a 20% drop in volume.Direct costs in the US are 60% of the current US sales price per filter (will not change).Calculate the one year contribution to profit of each pricing strategyandrecommend a strategy (show calculations)
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