Assume Isuzu produces a car in Japan for 1.8 million. On June 1, when new models...
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Assume Isuzu produces a car in Japan for 1.8 million. On June 1, when new models are introduced, the exchange rate is 150/USD. Consequently, the automaker sets the sticker price for the car at USD 12,000. By August 1, the exchange rate has dropped to 125/USD. Isuzu is worried that it will receive fewer Yen per sale ($12,000 125 = 1.5 million). What alternative options does Isuzu have to mitigate the effect of exchange rate changes? (5 points; 250 words) Assume Isuzu produces a car in Japan for 1.8 million. On June 1, when new models are introduced, the exchange rate is 150/USD. Consequently, the automaker sets the sticker price for the car at USD 12,000. By August 1, the exchange rate has dropped to 125/USD. Isuzu is worried that it will receive fewer Yen per sale ($12,000 125 = 1.5 million). What alternative options does Isuzu have to mitigate the effect of exchange rate changes? (5 points; 250 words)
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