Richland Crane (A). Richland Crane (U.S.) exports heavy crane equipment to several Chinese dock facilities. Sales are currently 16,000 units per year at the yuan equivalent of USD22,000 each. The Chinese yuan (CNY) has been trading at CNY8.20 = USD1.00, but a Hong Kong advisory service predicts the yuan will drop in value next week to CNY9.10 = USD1.00, after which it will remain unchanged for at least a decade. Accepting this forecast as given, Richland Crane faces a pricing decision in the face of the impending devaluation. It may either (1) maintain the same yuan price and in effect sell for fewer dollars, in which case Chinese volume will not change; or (2) maintain the same dollar price, raise the yuan price in China to offset the devaluation, and experience a 10% drop in unit volume. Direct costs are 75% of the U.S. sales price. a. What would be the short-run (one-year) impact of each pricing strategy? b. Which do you recommend? a. If Richland Crane maintains the same yuan price and same unit volume, what will be the firm's gross profits? USD (Round to the nearest dollar.)
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- Richland Crane (A). Richland Crane (U.S.) exports heavy crane equipment to several Chinese dock facilities. Sales are currently 16,000 units per year at the yuan equivalent of USD23,000 each. The Chinese yuan (CNY) has been trading at CNY8.30=USD1.00, but a Hong Kong advisory service predicts the yuan will drop in value next week to CNY9.00 USD1.00, after which it will remain unchanged for at least a decade. Accepting this forecast as given, Richland Crane faces a pricing decision in the face of the impending devaluation. It may either (1) maintain the same yuan price and in effect sell for fewer dollars, in which case Chinese volume will not change; or (2) maintain the same dollar price, raise the yuan price in China to offset the devaluation, and experience a 10% drop in unit volume. Direct costs are 75% of the U.S. sales price. a. What would be the short-run (one-year) impact of each pricing strategy? b. Which do you recommend? a. If Richland Crane maintains the same yuan price and…Richland Crane (B). Richland Crane (U.S.) exports heavy crane equipment to several Chinese dock facilities. Sales are currently 16,000 units per year at the yuan equivalent of USD25,000 each. The Chinese yuan (CNY) has been trading at CNY8.50 = USD1.00, but a Hong Kong advisory service predicts the renminbi will drop in value next week to CNY9.40 = USD1.00, after which it will remain unchanged for at least a decade. Accepting this forecast as given, Richland Crane faces a pricing decision in the face of the impending devaluation. It may either (1) maintain the same yuan price and in effect sell for fewer dollars, in which case Chinese volume will not change; or (2) maintain the same dollar price, raise the yuan price in China to offset the devaluation, and experience a 10% drop in unit volume. Direct costs are 75% of the U.S. sales price. Additionally, financial management believes that if it maintains the same yuan sales price, volume will increase at 12% per annum through year eight.…Richland Crane (B). Richland Crane (U.S.) exports heavy crane equipment to several Chinese dock facilities. Sales are currently 10,000 units per year at the yuan equivalent of USD24,000 each. The Chinese yuan (CNY) has been trading at CNY8.20= USD1.00, but a Hong Kong advisory service predicts the renminbi will drop in value next week to CNY9.20 = USD1.00, after which it will remain unchanged for at least a decade. Accepting this forecast as given, Richland Crane faces a pricing decision in the face of the impending devaluation. It may either (1) maintain the same yuan price and in effect sell for fewer dollars, in which case Chinese volume will not change; or (2) maintain the same dollar price, raise the yuan price in China to offset the devaluation, and experience a 10% drop in unit volume. Direct costs are 75% of the U.S. sales price. Additionally, financial management believes that if it maintains the same yuan sales price, volume will increase at 12% per annum through year eight.…
- Manitowoc Crane (US) exports heavy crane equipment to several Chinese dock facilities. Sales are currently 18,000 units per year at the yuan equivalent of $23,000 each. The chinese yuan (renminbi) has been trading at Yuan 7.80/$, but a Hong Kong advisory service predicts the renminbi will drop in value next week to Yuan 8.50/$ after which it will remain unchanged for at least a decade. Accepting this forecast as given, Manitowoc Crane faces a pricing decision in the face of the impending devaluation. It may either (1) maintain the same yuan price and in effect sell for fewer dollars, in which case Chinese volume will not change or (2) maintain the same dollar price, raise the yuan price in China to offset the devaluation and experience a 10% drop in unit volume. Direct costs are 75% of the US salesd price. If Manitowoc Crane maintains the same yuan price and same unit volume, what will be the firm's gross profits?_________ If Manitowoc Crane maintains the same dollar price, raises…Suppose your company imports computer motherboards from Singapore. The exchange rate is $1.4073 per Singapore dollar. You have just placed an order for 35,062 motherboards at a cost to you of S158 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $113 each. Calculate your profit if the exchange rates goes down by 14.51% over the next 90 days.M2 Manitowoc Crane (A). Manitowoc Crane (U.S.) exports heavy crane equipment to several Chinese dock facilities. Sales are currently 12,000 units per year at the yuan equivalent of $24,000 each. The Chinese yuan (renminbi) has been trading at Yuan7.60/$, but a Hong Kong advisory service predicts the renminbi will drop in value next week to Yuan8.50/$, after which it will remain unchanged for at least a decade. Accepting this forecast as given, Manitowoc Crane faces a pricing decision in the face of the impending devaluation. It may either (1) maintain the same yuan price and in effect sell for fewer dollars, in which case Chinese volume will not change; or (2) maintain the same dollar price, raise the yuan price in China to offset the devaluation, and experience a 10% drop in unit volume. Direct costs are 75% of the U.S. sales price. a. What would be the short-run (one-year) impact of each pricing strategy? b. Which do you recommend? a. If Manitowoc Crane maintains the same yuan…
- Suppose that a US-based company is buying Chinese goods. Current exchange rate for Chinese Yuan is 0.15 USD. The price of goods is ¥13,000 per unit. The company is buying 800 units per year with a fixed contract for the next two years. Suppose that Chinese Yuan appreciate to 0.2 USD in the next year. The US importer will respond to this by lowering the demand to 600 units in the third year. What cash flow will be reflected on the balance of payments at the end of the third year? Your Answer:You are required to forecast the expected change in the exports to the USA from China and Japan. The spot rate is 200 Japanese yen per yuan. The spot rate 6-months before was 180 Japanese yen per Yuan. The value of Chinese yuan is tied with the US$ and it will be. a. From China remain same, from Japan will increase. b. From China will increase, from Japan will remain same. c. From China remain same, from Japan will decrease. d. From China will decrease, from Japan will remain same. с. Answer OA Submit U: 0.0kB/s ch D: 0.0 kB/s DELLA Northwest party products manufacturer has production facilities in Spokane, WA and Bangladesh. Both facilities have capacities of 1 million units each per year. The cost of production and distribution of party supplies from Spokane is $1/unit. The cost of production and distribution from Bangladesh is 60 Taka/unit. (Current exchange rate is $1=85 Taka). Over the next two years the exchange rate is expected to strengthen by 10% with a 0.5 probability and weaken by 10% with a probability of 0.5. The expected demand this year is about 1.8 million units. Over the next two years the demand is expected to increase by 10% with a probability of 0.5 and decrease by 5% with a probability of 0.5. If demand is more than the capacity of the two plants then the remaining supplies are acquired from a competitor for $2/unit. What is the NPV of total cost with the current manufacturing setup? The company is considering increasing the capacity of the Bangladesh plant by 500,000 units at a fixed…
- Suppose your company imports computer motherboards from Singapore. The exchange rate is $1.3595 per Singapore dollar. You have just placed an order for 39328 motherboards at a cost to you of S146 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $118 each. Calculate your profit if the exchange rates goes down by 12.23% over the next 90 days. NOTE: Enter the number rounding to four DECIMALS. If your decimal answer is 0.034576Suppose your company imports computer motherboards from Singapore. The exchange rate is $1.4923 per Singapore dollar. You have just placed an order for 38251 motherboards at a cost to you of S159 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $118 each. Calculate your profit if the exchange rates goes up by 14.73% over the next 90 days. NOTE: Enter the number rounding to four DECIMALS.In Japan, Honda’s export price per vehicle was 5 million yen when the exchange rate was 125 yen per US dollar ($). The expected inflation rate in the Japanese yen for next year is 1%. The standard inflation rate in the US is 3%. Honda is actively trying to limit the passing exchange rate changes in prices to 60% of annual changes (i.e., if, for example, the US dollar depreciates by 10% against the yen, Honda will consider depreciation of the US dollar by only 6% (=0.60*10%) to calculate the new prices of its vehicles in US dollars). What was the price in $ of a Honda at the beginning of the year? Considering purchasing power parity, what would be the expected exchange rate between the yen and the US dollar at the end of the year Assuming Honda wants to pass 60% of exchange rate changes to the vehicle price, what would be the price of a Honda vehicle at the end of next year in US dollars ($)?