Why are exchange rates important to a firms cfo

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Reference no: EM131359729

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.

	Current exchange rates	Current quotes, including freight and other product, transportation, tariff, and insurance costs
Mexico	$1 = 12.392 pesos	150 pesos
Japan	$1 = 83.6184 yen	800 yen
China	$1 = 6.65891 yuan	68.5 yuan
India	$1 = 45.23 rupees	440 rupees

Reference no: EM131359729

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