3. If the US dollar strengthens against the Australian dollar, from 1.316 dollars to a US dollar to 2 Australian dollars per US dollar, what will happen to Australian dollar profit in #2, and how much...

Extracted text: 3. If the US dollar strengthens against the Australian dollar, from 1.316 dollars to a US dollar to 2 Australian dollars per US dollar, what will happen to Australian dollar profit in #2, and how much will it be?


Extracted text: ORANGE PRODUCTS INC. Orange Products Inc. is a producer of juice drinks in Florida, USA. Until now, the company has confined its operations and sales to the United States, but its CEO, Ray Jalkio wants to expand into the Pacific Rim. The first step is to set up sales subsidiaries in Japan and Australia. then to set a production plant in Japan, and finally to distribute the product throughout the Pacific Rim. The firm's CFO, Janet Jackson, is enthusiastic about the plan, but she is worried about the implications of the foreign expansion on the firm's financial management process. She has asked your group to develop a tutorial package that explains the basics of multinational financial management. The tutorial will be presented at the next management committee (ManCom) meeting. Consider the following exchange rates: US Dollar Required to buy one unit of Foreign Currency Japanese Yen Australian Dollar Number of units of Foreign Currency per US Dollar 109.89 1.316 0.0091 0.760 1. Orange Products can produce a liter of orange juice and ship it to Japan for $1.75. If the company wants a 50 percent markup on the product, how much should the orange juice sell in Japan?