You agree to sell 3 machines to an Italian printer for 4.6 MM Euros. Your cost for the machinery is $4.5 MM. The exchange rate at the time of the deal (July 30) was 1.4 USD per Euro. The equipment will ship today, and the invoice will be paid today for 4.6 MM Euro. The exchange rate today is 1.48 USD/ Euro. How has your profit changed with the change in Exchange rate? Show your calculations to get full points.

2. You have purchased 400 cases of fruit from Brazil for your store. You agreed to pay for this fruit in Brazilian Reals. At the time of the deal 1USD = 1.9 Reals. You agreed to pay 50 Reals per case. The fruit is delivered, and you have to pay the invoice of 20,000 Reals. Today the exchange rate is 1 USD = 1.6 Reals. What is your cost in USD vs. your anticipated cost when the deal was made? Show your calculations to get full points.

3. You are a Canadian seller of oil to the U.S. You agree to 12 monthly shipments of 500,000 barrels of oil each at a price of $50 per barrel. You are Canadian. The monthly exchange rate so far this year has been 1USD =

Jan 1.22 CAD Feb 1.27 CAD Mar 1.26 CAD Apr 1.29 CAD May 1.09 CAD Jun 1.16 CAD Jul 1.08 CAD Aug 1.09 CAD Sep 1.08 CAD

Your cost for producing the oil is 40 CAD. Map your profitability by month. What could you do differently? Why is this a better option? Be specific.

4. In the first week of August, you, as a Japanese automaker, decided to really drive sales of new cars. Starting October 1, you will offer a 2,000 USD rebate for any Toyota Prius. The car cost 2.0 MM JPY to make. The car sells for $24,000 USD. In August, the car sells for $24,000 at an exchange rate of 98 Yen per USD. Now in October the car will sell for $22,000 at an exchange rate of 89 Yen per USD. How has your profit changed?

Answer rating: 100% (QA)

1 Profit Change with Exchange Rate Fluctuation Initial deal Selling price 46 MM Euros Cost 45 MM Exchange rate 14 USDEuro Profit Selling price Cost Profit 46 MM Euros 14 USDEuro 45 MM Profit 644 MM 45 ... View the full answer