Assume that, on an average, Sony spends 30,000 to manufacture its products in Japan and spends $30
Question:
Assume that, on an average, Sony spends ¥30,000 to manufacture its products in Japan and spends $30 on marketing and distribution in the United States. Sony sells the product in the United States on an average at a price of $350 per product. Sony sells 20 million units in the United States.
If the exchange rate changes from USD 1 = JPY100 to USD 1 = JPY 75. How this impacts Sony’s cost of the product? Support your answer with numbers.
If Sony were to keep the price at $250, what will be the impact of change in the exchange rate mentioned in part a on Sony’s profitability?
What options are available to Sony in strong yen environment?If the same products were manufactured in the United States at a cost of $150 per piece and 40% of the parts were imported from Japan, what would be the impact of new exchange rate on Sony’s cost and profitability?
Expert Answer:
a When exchange rate USD 1 JPY 100 Cost of production JPY 30000 100 USD 300 When excha... View the full answer
An Introduction to Statistical Methods and Data Analysis
ISBN: 978-1305269477
7th edition
Authors: R. Lyman Ott, Micheal T. Longnecker
