Suppose Your Company Imports Computer Motherboards from Singapore

question 44

Multiple Choice

Suppose your company imports computer motherboards from Singapore.The exchange rate is currently 1.5803S$/US$.You have just placed an order for 30,000 motherboards at a cost to you of 170.90 Singapore dollars each.You will pay for the shipment when it arrives in 120 days.You can sell the motherboards for $148 each.What will your profit be if the exchange rate goes up by 8 percent over the next 120 days?

• A)$913,564
• B)$1,008,121
• C)$1,216,407
• D)$1,435,999
• E)$1,502,400

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Definitions:

Expected Revenue

Expected revenue is the amount of money a business anticipates earning over a specific period, based on forecasted sales volumes and prices.

Rationally

Making choices that are consistent and in line with one's self-interest, guided by the use of reason and available information.

Sealed-Bid

A type of auction or tender where bidders submit confidential offers, and usually, the highest bid wins without the bids being disclosed to other participants.

Second-Price Auction

In a second-price auction, the highest bidder wins but pays the price bid by the second-highest bidder, encouraging participants to bid their true value.