Question
You just started a very large comapny and that there is a potential of using over 1000 Metamorphizers over the next year. Your goal is
You just started a very large comapny and that there is a potential of using over 1000 Metamorphizers over the next year. Your goal is to book a multi-year order of 1000 Metamorphizers (in total). Pricing in the US for the Metamorphizer is:
2,500 USD each for quantities less than 10
2,250 USD for 11-50
2,000 USD for 51-100
Orders >100 can be negotiated for additional reductions (but Coaltender management will not go less than 1,500 USD per unit to preserve healthy margins, regardless of volume).
Currently the exchange rate for 1 India Rupee is equal to 0.014 USD. Company will only accept quotes in Rupees as they are worried about a change in the exchange rate adversely impacting them. Assume that 1 Rupee could fluctuate from 0.010 to 0.020 USD during the contract periods if you get the order. Briefly discuss the possible impact to your revenue dollars and profit dollars based on exchange rate variation should you sell all 1000 units at these three exchange rates:
1 Rupee to 0.010 USD
1 Rupee to 0.015 USD
1 Rupee to 0.020 USD
Your cost of goods sold for the Metamorphizer is 400 USD.
Note: Put relevant data in a table
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