Richland Crane $($A$).$ Richland Crane $($U$.$S$.)$ exports heavy crane equipment to several Chinese dock facilities. Sales are currently $16,000$ units per year at the yuan equivalent of USD$23,000$ each. The Chinese

yuan $($CNY$)$ has been trading at CNY$7\mathrm{.}90=$ USD$1\mathrm{.}00,$ but a Hong Kong advisory service predicts the yuan will drop in value next week to CNY$8\mathrm{.}70=$ USD$1\mathrm{.}00,$ after which it will remain unchanged for at least a

decade. Accepting this forecast as given, Richland Crane faces a pricing decision in the face of the impending devaluation. It may either $(1)$ maintain the same yuan price and in effect sell for fewer dollars, in

which case Chinese volume will not change; or $(2)$ maintain the same dollar price, raise the yuan price in China to offset the devaluation, and experience a $10\%$ drop in unit volume. Direct costs are $75\%$ of the

U$.$S$.$ sales price.

a$.$ What would be the short$-$run $($one$-$year$)$ impact of each pricing strategy?

b$.$ Which do you recommend?

a$.$ If Richland Crane maintains the same yuan price and same unit volume, what will be the firm's gross profits?

USD $($Round to the nearest dollar.$)$