Ranbaxy (India) in Brazil. Ranbaxy, an India-based pharmaceutical firm, has continuing problems with its cholesterol reduction product's price in one of its rapidly growing markets, Brazil. All product is produced in India, with costs and pricing initially stated in Indian rupees (Rps), but converted to Brazilian reais (R$) for distribution and sale in Brazil. In 2009, the unit volume was priced at Rps21,800, with a Brazilian reais price set at R$896. But in 2010, the reais appreciated in value versus the rupee, averaging Rps26.42 = R$1.00. In order to preserve the reais price and product profit margin in rupees, what should the new rupee price be set at? First, the implied spot exchange rate for the previous year, 2009 must be found. The implied spot exchange rate for the previous year, 2009 is Rps /R$. (Round to two decimal places.)

Ranbaxy (India) in Brazil. Ranbaxy, an India-based pharmaceutical firm, has continuing problems with its cholesterol reduction product's price in one of its rapidly growing markets, Brazil. All product is produced in India, with costs and pricing initially stated in Indian rupees (Rps), but converted to Brazilian reais (R$) for distribution and sale in Brazil. In 2009, the unit volume was priced at Rps21,800, with a Brazilian reais price set at R$896. But in 2010, the reais appreciated in value versus the rupee, averaging Rps26.42 = R$1.00. In order to preserve the reais price and product profit margin in rupees, what should the new rupee price be set at? First, the implied spot exchange rate for the previous year, 2009 must be found. The implied spot exchange rate for the previous year, 2009 is Rps /R$. (Round to two decimal places.)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Ranbaxy (India) in Brazil. Ranbaxy, an India-based pharmaceutical firm, has continuing problems with its cholesterol reduction product's price in one of its rapidly growing markets, Brazil. All product is produced in India, with costs and pricing initially stated in Indian rupees (Rps), but converted to Brazilian reais (R$) for distribution and sale in Brazil. In 2009, the unit volume was priced at Rps22,700, with a Brazilian real price set at R$904. But in 2010, the real appreciated in value versus the rupee, averaging Rps26.33/ R$. In order to preserve the real price and product profit margin in rupees, what should the new rupee price be set at? ..... First, the implied spot exchange rate for the previous year, 2009 must be found. The implied spot exchange rate for the previous year, 2009 is Rps R$. (Round to two decimal places.)
Davao has a potential foreign customer that has offered to buy 1,500 tons at P450 per ton. Assume that all of Davao’s costs would be at the same levels and rates as last year. What net income after taxes would Davao make if it took this order and rejected some business from regular customers so as not to exceed capacity? Answer: 221,500 Without prejudice to your answers to previous questions, and assume that Davao plans to market its product in a new territory. Davao estimates that an advertising and promotion program costing P61,500 annually would need to be undertaken for the next two or three years. In addition, a P25 per ton sales commission over and above the current commission to the sales force in the new territory would be required. How many tons would have to be sold in the new territory to maintain Davao’s current after-tax income of P94,500? Answer: 307.5
Due to rising labor costs in Malaysia, Domain Computer, based in Singapore, is considering shorting part of its production facilities from Malaysia to an emerging market, Vietnam, to better integrate its supply chain in the South east Asia region. John Lawson, the CFO of the company, estimates that Domain Computer needs to invest USD735,000 to acquire an existing factory in Vietnam and another USD285,000 in renovations and installation of new machineries. The cost of training new workers is estimated to be USD310,000. Andrew believes that the new factory will lead to an estimated USD928,000 savings in labor costs and another USD417,000 savings in logistics expenses. Required: Use cost-benefit analysis to recommend whether Domain Computer should shift parts of its production facilities from Malaysia to Vietnam. Explain your answer.
The Zomcast cable TV company is considering out- sourcing its call center to the Philippines. The cost of hiring operators and staff in the Philippines is 60 per- cent of the salary and benefits paid in the U.S. The operators are slightly less efficient at handling calls They frequently read from scripts and are not experi- enced in handling calls. The efficiency is estimated to be 80 percent of the U.S. in terms of staffing operators. Currently, the U.S. has an average of 83 operators handling calls paid at $15.00 per hour and 5 managers. The call center is staffed around the clock and throughout the year, but each operator works 2000 hours in a year. The Philippines will need the same number of managers. It will cost $100,000 to train the operators. It will cost an additional $110,000 per year to administrate the contract and supervise the operation from the U.S headquarters. a. What are the total costs of outsourcing this call center to the Philippines compared to the U.S.? b. What…
A domestic shoe company distributes running shoes and tennis shoes for $90 per pair to it domestic shoe retailers. The marginal cost of producing a pair of running shoes is $50 and the marginal cost of producing a pair of tennis shoes is $45. Ignore any potential issues of bundling the two types of shoes together as part of the sale and any competitive effects that international sales might have on current domestic sales. A Chinese retailer offers to purchase running shoes for $55 per pair and tennis shoes for $55 per pair, for distribution in China. Suppose the domestic shoe company has a maximum capacity of 60,000 pairs of running shoes and 50,000 pairs of tennis shoes in total, of which 40,000 pairs of running shoes and 45,000 pairs of tennis shoes can be sold to domestic retailers. How many pairs of running shoes would you allocate to the domestic market if the Chinese retailer offers to purchase 15,000 of running shoes? a. 60,000 pairs O b.40,000 pairs c. 45,000 pairs )d. 15,000…
27. Mr. Kwon imports Korean vegetables and sells them in the domestic market for Korean residents in the Philippines. The following data relates to his operations during the period: Total landed cost of importation P 800,000 Total Sales 1,200,000 What is the VAT on importation? (No Solutions) 28. In the immediately preceding problem, what is the VAT on sales?.
Hans Brinker is assistant vice-president for marketing for Skagen Ice Skate Company (SIS). SIS does all of its own manufacturing in Denmark and then distributes worldwide through its sales office. World prices for foreign sales offices are set by the home office. Brinker is now setting the price list for all U.S. sales offices, and needs prices set for the coming year. The current spot rate is ?? = ???? $ = 5.6050, with a one-year forward rate of ?? = ???? $ = 5.5685. The one-year deposit rates for Danish krone and U.S. dollars are 1.5% and 1.35%, respectively. SIS’s best-selling professional figure skate, the Royal Silver Blade, is currently priced at $450 to U.S. retailers. Current inflation estimates for Denmark and the United States are both about 3%. SIS’s policy is to try to absorb about 50% of all exchange rate-induced price increases, but pass along 100% of all exchange rate price decreases if possible. The world skate business is competitive. Brinker phones you and explains…
Crackle Cookie Company is a relatively new company and so far has sold its products only in its home country, Denmark. In December, Crackle determined that it had excess capacity to produce more of its special Christmas cookies. It is trying to decide whether to use that capacity to ship a batch of cookies overseas. The marketing department has determined that the United States and Great Britain are the two most viable markets. Crackle has enough excess capacity to produce only one batch, which can be shipped to either country. The materials and labor cost to produce the batch amount to 8,500 kroner. The marketing department, which located a U.S. shipping company that could deliver to either location, also provided the following information. Required: a. Assume Crackle exports the batch to the United States, what is its estimated profit/loss in Danish kroner? b. Assume Crackle exports the batch to Great Britain, what is its estimated profit/loss in Danish kroner?
Due to rising labor costs in Malaysia, Domain Computer, based in Singapore, is considering shifting part of its production facilities from Malaysia to an emerging market, Vietnam, to better integrate its supply chain in the South east Asia region. John Lawson, the CFO of the company, estimates that Domain Computer needs to invest USD735,000 to acquire an existing factory in Vietnam and another USD285,000 in renovations and installation of new machineries. The cost of training new workers is estimated to be USD310,000. He believes that the new factory will lead to an estimated USD928,000 savings in labor costs and another USD417,000 savings in logistics expenses. Required: Use cost-benefit analysis to recommend whether Domain Computer should shift parts of its production facilities from Malaysia to Vietnam. Explain your answer. You are required to write 500 to 800 words. ( Currently I have completed my Cost-benefit analysis; but I am confused as to how to use PESTLE's analysis with…
Company Xorex is selling printers. They have 36 salespeople in Canada and 48 salespeople in the US. Their annual salary is $48K for each salesperson. Salespeople also receive a 2% commission fee for each printer they sell. Each US salesperson is selling 24 printers each month, but Canadians are selling only 15 printers per month. To improve the performance of Canadian salespeople, Xorex has decided to buy a new sales software; however, they need to train all Canadian salespeople before they start using this new software. Therefore, Xorex has decided to send 3 Canadian salespeople to the US for training each month, so all Canadian salespeople will have been trained in the US by the end of the year. They think that when all employees are trained, they can implement the new sales program and each salesperson can sell 21 printers in Canada each month. Xorex offers each Canadian employee a $4500 incentive to participate in this training program. It also pays for transportation and…
Billabong Fashion is based in Melbourne, Australia. Billabong Fashion has a subsidiary in Shanghai that generates RMB85 million in annual sales. Any earnings generated by the subsidiary are reinvested to support its operations. Belle Fashion is the close competitor of Billabong Fashion. Belle Fashion is a local Australian company located in Japan with annual export sale to Malaysia of about MYR 45 million. Based on the information provided, which firm is subject to a higher degree of translation exposure? Justify your answer with thorough explanation on both companies.
Bulldogs Inc., which is located in the USA, imports dog treats from Thailand Baht. Each bag of dog treats costs 10 Thailand Baht. Bulldogs Inc. sells the dog treats in the Canadian Market for 3 Canadian Dollar. Spot rates are: · 1 Thailand Baht = USD 2 · 1 Canadian Dollar = USD 10 How much profit denominated in USD does Bulldogs Inc. make on each bag of dog treats sold? (Format: XX.XX USD)

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