Write a white paper of 700-1,000 words, plus calculations, that covers the following topics:
APA Style
5 pages
Knowing that the absolute exchange rate and trends in changing exchange rates can dramatically impact the firm's profitability, the chief financial officer (CFO) has asked you for a white paper to help determine the best location for outsourcing your product's manufacturing.
Plus calculations, that covers the following topics:
• In lay terminology and using no quotes, describe what exchange rates are.
• Why are exchange rates important to a firm's CFO, investors, and customers?
• Describe and explain at least 3 causes of changing exchange rates.
• Describe the impact of changes in exchange rates on a company's profitability. Include a numerical example to demonstrate your point.
Assume the following in your calculations:
• The current U.S. manufacturing cost is $10/unit.
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Current exchange rates
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Current quotes, including freight and other product, transportation, tariff, and insurance costs
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Mexico
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$1 = 12.392 pesos
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150 pesos
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Japan
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$1 = 83.6184 yen
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800 yen
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China
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$1 = 6.65891 yuan
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68.5 yuan
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India
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$1 = 45.23 rupees
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440 rupees
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