Problem:
Suppose your company imports computer motherboards from Singapore. The exchange rate is currently 1.2864 S$/US$. You have just placed an order for 30,000 motherboards at a cost to you of 232.50 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $196 each.
Required:
Question 1: What is your profit at the current exchange rate?
Question 2: What is your profit if the exchange rate goes up by 10 percent?
Question 3: What is your profit if the exchange rate goes down by 10 percent?
Question 4: What percentage rise or fall does this represent in terms of the Singapore dollar versus the U.S. dollar?
Note: Please show how you came up with the solution.