Question
Honda Motor Part 1: Honda Motor Company manufactures some of their models in Japan and exports...
Honda Motor Part 1:
Honda Motor Company manufactures some of their models in Japan and exports them to their U.S. subsidiary, American Honda. One such imported vehicle costs 1,772,000 JPY (Japanese Yen). American Honda purchases these vehicles from the parent company in JPY, then sells them to dealers in the United States priced in USD, at prices that remain stable over the course of a model year. American Honda is concerned about fluctuations in the JPY cost of the vehicles they purchase from their Japanese parent company, because rising JPY prices could reduce their USD profit margin. The spot rate of the JPY against the USD is currently 111.06 JPY per USD. What is the cost of the imported vehicle in USD?
A. $17,999.99
B. $16,222.99
C. $15,955.34
D. $15,001.89
Honda Motor Part 2:
Use the vehicle cost in USD that you calculated in Honda Motor Part 1. If the price at which American Honda sells the vehicle to dealers in the U.S. is $17,999.99, what is their profit margin per vehicle in USD?
A. $2,044.65
B. $1,999,95
C. $1,900.50
D. $1,799.99
Honda Motor Part 3:
If the spot rate of the JPY against the USD changes from 111.06 JPY per USD to 105.05 JPY per USD, this represents a(n) __________ of the JPY versus the USD. Use the imported vehicle cost in JPY that was quoted in "Honda Motor Part 1". The cost of the imported vehicle in USD at the new spot rate of 105.05 JPY per USD is ___________.
A. appreciation; $16,168.50
B. depreciation; $15,805.22
C. appreciation; $16,868.16
D. depreciation; $16.868.16
THEY ARE ALL RELATED TO EACH OTHER.
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