User Account

All Pages

What would be the price of the car in the us market

Assignment Help Finance Basics
Reference no: EM132775991

AvtoVAZ OAO, a leading auto manufacturer in Russia, was launching a new automobile model in 2001, and is in the midst of completing a complete pricing analysis of the car for sales in Russia and export. The new car, the Kalina, would be initially priced at Rubles 260,000 in Russia and sell in U.S. dollars at the current spot rate they intend to raise the price domestically with the rate of Russian inflation over time, but is worried about how that compares to the export price given U.S. dollar inflation and the future exchange rate. Use the following data table to answer the pricing analysis questions.

Calendar year 2001 2002 2003 2004 2005 2006

Kalina Price (rubles) 260,000

Russian inflation (forecast) 14.0% 12.0% 11.0% 8.0% 8.0%

U.S. inflation (forecast) 2.5% 3.0% 3.0% 3.0% 3.0%

Exchange rate (rubles = USD 1.00) 31.77

Given the current spot rate, what would be the price of the car in the US market? Answer with two decimal places.

Reference no: EM132775991

Questions Cloud

Evaluating web based analytics platforms : Applications and describe their functionality and why you chose them. Discuss your choice in class with your lecturer and other students.
Participating employees and sponsoring company file : Who will be subject to taxation when the participating employees and sponsoring company file their prior year returns?
Calculate the effective cost of funds to company : Calculate the effective (implied) cost of funds to the company assuming purchase power parity, one year from now? Answer as a percentage with two decimal places
Report the current gdp in trillions of dollars : Report the current GDP in trillions of dollars. Report the current federal debt in trillions of dollars.
What would be the price of the car in the us market : Given the current spot rate, what would be the price of the car in the US market? Answer with two decimal places.
Calculate the? after-tax return : Calculate the? after-tax return of a 11.36 ?percent, 20-year,? A-rated corporate bond for an investor in the 10 percent marginal tax bracket.
Calculate the? after-tax rate of? return : What are the implications of this result for cash management? decisions?
Why is accounting important : Why is accounting important? Who governs accounting? How consistent is accounting among companies in the same industry?
Evaluating the performance of managers of the company : Critically examine the skills, experience and attributes needed to become a corporate accountant. Also, critically evaluate how the topics that you have learned

Reviews

Write a Review

Finance Basics Questions & Answers

  Explain the term carry trade

Explain the term Carry trade. What are the market conditions that are needed for this trading strategy to be successful?

  Major advantage of intuitive decision-making

Compared to fully rational decision-making, what is a major advantage of intuitive decision-making?

  What is the expected price of the stock

GM is expected to grow at 12% in year 1, 11% in years 2 and 3, 8 % in year 4 and then grow at a constant rate of 5% in the years that follow.

  Discuss about the multinational corporations

Multinational Corporations. Given that many multinationals based in many countries have much greater sales outside their domestic markets than within them.

  Explain produce for the coming month

Beginining inventory for October is 300 units. How many units should the firm produce for the coming month?

  Determine whether each transaction affects common stock c

presented below are a number of transactions. determine whether each transaction affects common stock c dividends d

  Describe some of the measures used by companies to

describe some of the measures used by companies to discourage unfriendly takeover

  Calculate expected rate of return and standard deviation

Calculate the expected rate of return and standard deviation for each investment.

  Does this enhance or diminish the investor''s return on stock

During the year, the pound appreciates against the yen. Does this enhance or diminish the investor's return on the stock?

  What is capital rationing and have you experienced it

Which portion of the WACC calculation is impacted by taxes? How can a company reduce its cost of capital? How is WACC used in financial planning to optimize capital structure?

  Find amount of risk in the equity investment

Without assuming riskless debt, what is the relationship between the ex ante equity risk premium and the amount of risk in the equity investment.

  Is such tax consistent with a mechanistic view of government

Obesity is perceived to be a national health problem in the United States. One suggestion to deal with this problem is a "fat tax." The idea is to levy a tax.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd