Chapter 17 Problem 15 Build a Model help

Chapter 17 Problem - A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44

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Ch 17-15 Build a Model TABLE 17-1 Exchange rates of select major currencies, relative to the U.S. dollar Direct Indirect Quotations Quotations British pound 1.4915 0.6705 Mexican peso 0.0758 13.1978 Euro 1.3276 0.7532 Japanese yen 0.0101 98.8600 TABLE 17-2 (abridged) Key Currency Cross-Exchange Rates Dollar Euro Pound Peso Yen Japan 98.86000 131.2465 147.4497 7.4906 .... Mexico 13.19780 17.5214 19.6845 .... 0.1335 United Kingdom 0.67050 0.8901 .... 0.0508 0.0068 Euro 0.75320 .... 1.1235 0.0571 0.0076 United States .... 1.3276 1.4915 0.0758 0.0101 a. How much, in dollars, does it cost for Yohe to produce the SY-20? What is the dollar sale price of the SY-20? Input Data Cost of component X (in euros € 84 Cost of component Y (in pesos) 650 Cost of component Z (in pounds) £105 Sale price of the SY-20 (in yen) 38,000 We will convert the cost of each component to dollars, and find the total cost of the SY-20. We will do the same to find the dollar sale price. A multinational corporation that produces and distributes telecommunications technology. Although its corporate headquarters are located in Maitland, Florida, Yohe usually must buy its raw materials in several different foreign countries, and several different foreign currencies. The matter is complicated even further by the fact that Yohe usually sells its products in other different foreign countries. One product in particular, the SY-20 radio transmitter draws its principal components Component X, Component Y, and Component Z from Germany, Mexico, and England, respectively. Specifically, Component X costs 84 euros, Component Y costs 650 Mexican pesos, and Component Z costs 105 British pounds. The largest market for the SY-20 is in Japan, where it sells for 38,000 Japanese yen. Naturally, Yohe is intimately concerned with economic conditions that could adversely affect dollar exchange rates. You will find Tables 17-1, 17-2, and 17-3 useful for this problem. Note: The pound and euro are quoted as direct quotations. Other currencies are quoted as
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This note was uploaded on 02/02/2011 for the course FINC 350 taught by Professor Johnson during the Spring '11 term at UCLA.

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Chapter 17 Problem - A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44

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