Problems 1 and 2 are based on the Spectrum Manufacturing AB case (scenarios 1, 2, and 3) presented in the chapter. Calculate Spectrum’s economic exposure under the following new scenarios:

Scenario 5:

Volume and import prices rise; other variables remain the same.

The krona sales price remains at SEK 20.

Unit sales volume rises by 50%, both domestically and abroad, owing to the lower dollar price.

Because krona costs of local labor and materials stay the same, krona unit operating expenditures rise by only 5.6%.

The firm’s various overhead expenses do not change.