Modine (Racine-based WI Firm) Sells Heat Sinks in the USA (all sales are in USD). They...
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Modine (Racine-based WI Firm) Sells Heat Sinks in the USA (all sales are in USD). They currently have sales/unit of $125,000. All of Modine's costs are variable All of Modine costs originate in Mexico - they buy all inputs from Mexico. The 3-letter code for the United States dollar is USD and the 3-letter code for the Mexican Peso is MXN. Current Unit Costs (in USD) are equal to $100,000, at the current exchange rate of 17.50 [MXN/USD]. Thus, Modine earns $25,000 per heat sink system ($125,000 - $100,000). Modine's CFO took Fin 331 from Professor Beyer and is concerned about unit profitability if the exchange-rate moves. However, the CFO is unsure of whether the Peso strengthening or weakening is of concern. Let's help them out! A) Determine Modine's unit profit (in USD) if the exhange rate MXN/USD goes to 20? B) Determine Modine's unit profit (in USD) if the exchange rate MXN/USD is at 15? C) At what exchange rate would Modine break even per unit (express your answer in MXN/USD)? Label your answers carefully with A, B, C. Modine (Racine-based WI Firm) Sells Heat Sinks in the USA (all sales are in USD). They currently have sales/unit of $125,000. All of Modine's costs are variable All of Modine costs originate in Mexico - they buy all inputs from Mexico. The 3-letter code for the United States dollar is USD and the 3-letter code for the Mexican Peso is MXN. Current Unit Costs (in USD) are equal to $100,000, at the current exchange rate of 17.50 [MXN/USD]. Thus, Modine earns $25,000 per heat sink system ($125,000 - $100,000). Modine's CFO took Fin 331 from Professor Beyer and is concerned about unit profitability if the exchange-rate moves. However, the CFO is unsure of whether the Peso strengthening or weakening is of concern. Let's help them out! A) Determine Modine's unit profit (in USD) if the exhange rate MXN/USD goes to 20? B) Determine Modine's unit profit (in USD) if the exchange rate MXN/USD is at 15? C) At what exchange rate would Modine break even per unit (express your answer in MXN/USD)? Label your answers carefully with A, B, C.
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Modines Unit Profit under Different Exchange Rates A Exchange Rate MXNUSD 20 Unit Cos... View the full answer
Related Book For
Heat And Mass Transfer Fundamentals And Applications
ISBN: 9780073398181
5th Edition
Authors: Yunus Cengel, Afshin Ghajar
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