You are the director of U.S. operations for Nissan. In 2015, you developed plans for a new sports truck model, the Nissan Minimax to be sold at $30,000. This model can be made in both the U.S. and Japan. Gross margin (meaning margin after all direct costs) is approximately 50%.

1. What is the cost of the Minimax to Nissan if it is made in

Japan vs. made in the U.S. in 2015 and 2020, assuming

no inflation?

2. What actions would you recommend to the home office in

Tokyo to address the current situation?

SPOT RATES FOR CURRENCY EXERCISE

Country Spot Rates (3-11-15) Spot Rates (3-11-20)

Canada C$ 0.7683 0.7282

Mexico pesos 0.0646 0.0474

Brazil reals 0.3315 0.2133

Japan yen 0.0083 0.0095