Reference no: EM131959966
Assignment
There are four assignment problems. Please follow the instructions given at the end of each question if any.
Assignment Problems
1. Consider a machining work cell consisting of 2 machines and 1 worker. The machines need to be adjusted before they can be used to produce a unit. The setup times and the operation times of the machines are given in the following table.
|
Workstation
|
Processing time per unit (in seconds)
|
Setup Time (in seconds)
|
|
A
|
100
|
20
|
|
B
|
90
|
10
|
Suppose the total walk time of the worker is 60 seconds. The total task time of the worker is 80 seconds. What is the cycle time (in seconds) of the cell? Please provide at least one step of calculation and the correct answer for full credit. (4 points)
2. Suppose the exchange rate between Japanese Yen and U.S. dollar is 100 ¥/$. Is this the direct quote or indirect quote from the U.S. perspective? State the reason.
3. Suppose the direct quote of the nominal exchange rate between U.S. dollar and Euro increases by 2% from the U.S. perspective. The inflation rate in the U.S. is 4% and the inflation rate in France is 5%.
a. What is the percentage change in the real exchange rate between US dollar and Euro? Please provide the formula, at least one step of calculation, and the correct value for full credit.
b. Is this a currency depreciation or appreciation in the U.S.? Why?
4. Suppose a U.S. company contracted to sell 10,000 units of a product to a French company at a unit sales price of €2.5 with delivery in 90 days and payment due on delivery. The nominal exchange rate between U.S. dollar and Euro is 1.3 $/€ on the contract signing date. The U.S. company has the option of using a 90-day forward contract to protect itself against an adverse change in the exchange rate. Based on the assessment of the financial markets, the 90-day forward contract can be purchased at a premium of 2%.
a. If no forward contract is used and the nominal exchange rate between U.S. dollar and Euro increases to 1.4 $/€ on the delivery date, how much will the U.S. company receive in terms of U.S. dollar on the delivery date? Please provide at least one step of calculation for full credit.
b. If the U.S. company chooses to use the 90-day forward contact to protect against the foreign exchange risk, how much will the U.S. company receive in terms of U.S. dollar on the delivery date? Please provide the forward rate and at least one step of calculation for full credit.