Manitowoc Crane (U.S.) Exports Heavy Crane Equipment

Answer for Manitowoc Crane (U.S.) Exports Heavy Crane Equipment for $2 Only (Instant Download)

Manitowoc

Manitowoc Crane (8). Manitowoc Crane (U.S.) exports heavy crane equipment to several Chinese dock facilities. Sales are currently 10,000 units per year at the yuan equivalent of $22,000 each. The Chinese yuan (renminbi) has been trading at Yuan 7.60/$, but a Hong Kong advisory service predicts the renminbi will drop in value next week to Yuan 8.30/$, after which it will remain unchanged for at least a decade. Accepting this forecast as given, Manitowoc Crane faces a pricing decision in the face of the impending devaluation. It may either (1) maintain the same yuan price and in effect sell for fewer dollars, in which case Chinese volume will not change or (2) maintain the same dollar price, raise the yuan price in China to offset the devaluation, and experience a 10% drop in unit volume Direct costs are 75% of the U.S. sales price. Additionally, financial management believes that if it maintains the same yuan sales price, volume will increase at 10% per annum through year eight. Dollar costs will not change. At the end of years, Manitowoc’s patent expires and it will no longer export to China. After the yuan is devalued to Yuan 8.30/5, no further devaluations are expected. If Manitowoc Crane raises the yuan price so as to maintain its dollar price, volume will increase at only 2% per annum through year eight, starting from the lower initial base of 9,000 units. Again, dolar costs will not change, and at the end of eight years Manitowoc Crane will stop exporting to China. Manitowoc’s weighted average cost of capital is 13%. Given these considerations, what should be Manitowoc’s pricing policy?

Two Companies Exchanged a Group of Manufacturing Equipment

Two Companies Exchanged a Group of Manufacturing Equipment in $12 onlyManufacturing Equipment

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Two companies exchanged a group of manufacturing equipment as follows:

ABC Company exchanged the group of equipment items, which had an appraised value of $4,800,000, a cost of $7,590,000, and accumulated depreciation of $3,600,000 for a group of equipment items that belongs to XYZ, Inc.

XYZ Inc’s group of equipment items had an appraised value of $4,512,000, a cost of $9,030,000, and accumulated depreciation of $4,752,000.

XYZ, Inc. paid $288,000 cash in the exchange transaction.