2. What would happen if Archer-Lock and Tabaczynski did not hedge at all? No hedging means...

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2. What would happen if Archer-Lock and Tabaczynski did not hedge at all? No hedging means full exposure to currency risk. The company could potentially lose all of their money if USD depreciated. The 3 possible scenarios are outlined below: Final Sales volume Average cost per participant 25,000 1,000 Scenarios Strong Dollar Base Case Weak Dollar Exchange Rate 1.01 1.22 1.48 Total cost $ 25,250,000 $ 30,500,000 $ 37,000,000 Projected cost $ 30,500,000 $ 30,500,000 $ 30,500,000 Profit Impact Total cost per participant SS $ 5,250,000 $ $ 1,010 $ 1,220 $ SS $ (6,500,000) 1,480 2. What would happen if Archer-Lock and Tabaczynski did not hedge at all? No hedging means full exposure to currency risk. The company could potentially lose all of their money if USD depreciated. The 3 possible scenarios are outlined below: Final Sales volume Average cost per participant 25,000 1,000 Scenarios Strong Dollar Base Case Weak Dollar Exchange Rate 1.01 1.22 1.48 Total cost $ 25,250,000 $ 30,500,000 $ 37,000,000 Projected cost $ 30,500,000 $ 30,500,000 $ 30,500,000 Profit Impact Total cost per participant SS $ 5,250,000 $ $ 1,010 $ 1,220 $ SS $ (6,500,000) 1,480

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If ArcherLock and Tabaczynski did not hedge at all and were fully exposed to currency risk their pro... View the full answer