Jaguar Has Full Manufacturing Costs of Their S-Type Sedan of £22,803

question 47

Multiple Choice

Jaguar has full manufacturing costs of their S-type sedan of £22,803. They sell the S-type in the UK with a 20% margin for a price of £27,363. Today these cars are available in the U.S. for $55,000 which is the UK price multiplied by the current exchange rate of $2.01/£. Jaguar has committed to keeping the U.S. price at $55,000 for the next six months. If the UK pound appreciates against the USD to an exchange rate of $2.15/£, and Jaguar has not hedged against currency changes, what is the amount the company will receive in pounds at the new exchange rate?

• A) £22,803
• B) £25,581
• C) £27,363
• D) £55,000

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Definitions:

Entire Budget

The total amount of financial resources available or allocated for a specific purpose, project, or period.

Price Of Peaches

The amount of money required to purchase a specific quantity of peaches in the market.

Price Of Pineapples

The amount of money required to purchase a single unit or specified amount of pineapples.

Money Budget

An estimation of the revenue and expenses over a specified future period of time, specifically focusing on cash flows and monetary resources.