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

question 60

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 percentage margin the company will realize given the new exchange rate?

• A) 20.0%
• B) 15.3%
• C) 12.2%
• D) 7.2%

---

Definitions:

Hierarchical Relationships

Organizational or societal relationships in which individuals or groups are ranked one above the other according to status, authority, or some level of power.

State Power

The ability of a government to exert control and enforce laws over its territory and population.

Guest Worker

A person who is permitted to reside in a foreign country for the purpose of employment, usually temporarily.

Economic Restructuring

The changes in the structure of an economy, affecting its sectors or industries, often driven by technological advancements or globalization.