Rolls-Royce is struggling with its pricing strategy with a number of its major customers in Continental Europe,
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Question:
Since Rolls-Royce is a British company with most manufacturing of the Airbus engines in the United Kingdom, costs are predominantly denominated in British Pounds. But in the past year the pound steadily weakened against the euro. Rolls-Royce has traditionally denominated its sales contracts with Airbus in Airbus' home currency, the euro. The spot rate of British Pounds has changed from € 1.4918 = £1 in the last year to € 1.1066 = £1.
Assuming each Rolls-Royce engine marketed to Airbus costs £22.5 million each, how has the price of that engine changed in euros today?
Related Book For
Multinational Business Finance
ISBN: 978-0133879872
14th edition
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
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