Exhibit 1: Pre-Brexit Income Statement, Assuming 1.00 = 1.16 Per Unit Quantity (Units) Sales in
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Exhibit 1: Pre-Brexit Income Statement, Assuming £1.00 = €1.16
Per Unit | Quantity (Units) | € | £ | |
Sales in the U.K. | £200 | 40,000 | 9,280,000 | 8,000,000 |
U.K. Costs | ||||
| £5 | 40,000 | 232,000 | 200,000 |
| €90 | 40,000 | 4,176,000 | 3,600,000 |
| 400,000 | |||
| 500,000 | |||
Profit (U.K. Subsidiary) | £4,252,941 (€5,784,000) |
- Recalculate the income statement above using the post Brexit exchange rate of £00 = €1.16, assuming that there are no changes in prices charged by the company to U.K. buyers. Calculate profits in both pounds and euros. Fill out Exhibit 2 below with your answers:
Exhibit 2: Post-Brexit Income Statement, Assuming £1.00 = €1.16, no change in prices
Per Unit | Quantity (Units) | € | £ | ||||||||||||||||||||||||||||||
Sales in the U.K. | £200 | ||||||||||||||||||||||||||||||||
U.K. Costs | |||||||||||||||||||||||||||||||||
| £5 | ||||||||||||||||||||||||||||||||
| €90 | ||||||||||||||||||||||||||||||||
| 400,000 | ||||||||||||||||||||||||||||||||
| 500,000 | ||||||||||||||||||||||||||||||||
Profit (U.K. Subsidiary) |
Exhibit 3: Post-Brexit Income Statement, Assuming £1.00 = €1.16, optimal price with ep =- 1.1
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ISBN: 978-1439079232
12th Edition
Authors: James r. mcguigan, R. Charles Moyer, frederick h. deb harris
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