Suppose your company imports computer motherboards from Singapore. The exchange rate is given in Figure 18.1. You

Question:

Suppose your company imports computer motherboards from Singapore. The exchange rate is given in Figure 18.1. You have just placed an order for 30,000 motherboards at a cost to you of 185.50 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $160 each. Calculate your profit if the exchange rate goes up or down by 10 percent over the next 90 days. What is the break-even exchange rate? What percentage rise or fall does this represent in terms of the Singapore dollar versus the U.S. dollar?

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...