- 111 Homework Chapter 12 Homework Rolls Royce Turbine Engines Rolls Royce Is Struggling With Its Pricing Strategy With 1 (74.03 KiB) Viewed 33 times
- 111 Homework Chapter 12 Homework Rolls Royce Turbine Engines Rolls Royce Is Struggling With Its Pricing Strategy With 2 (82.44 KiB) Viewed 33 times
- 111 Homework Chapter 12 Homework Rolls Royce Turbine Engines Rolls Royce Is Struggling With Its Pricing Strategy With 3 (83.22 KiB) Viewed 33 times
111 Homework: Chapter 12 Homework Rolls-Royce Turbine Engines. Rolls-Royce is struggling with its pricing strategy with a number of its major customers in Continental Europe, particularly Airbus. Since Rolls-Royce is a British
company with most manufacturing of the Airbus engines in the United Kingdom, costs are predominantly denominated in British pounds. But in the period shown in the popup window, 2007-2009, the pound steadily weakened against the euro. Rolls-Royce has traditionally denominated its sales contracts with Airbus in Airbus' home currency, the euro. After completing the table answer the following
questions: a. Assuming each Rolls-Royce engine marketed to Airbus is initially priced at £22.50 million each, how has the price of that engine changed over the period shown when priced in euros at the current spot rate? Date Price (millions of pounds, £) Spot rate (euro = 1.00 pound) Price (milions of euros, €) b. Complete the table in the popup window. What is the cumulative percentage change in the price of the engine in euros for the two-year period? c. If the price elasticity of demand for Rolls-Royce turbine sales to Airbus is relatively inelastic, and the price of the engine in British pounds never changes over the period, what does this price change mean for Rolls-Royce's total sales revenue on sales to Airbus of this engine? d. Compare the prices and volumes for the first quarter of each of the three years shown in the table in part b above. Who has benefitted the most from the exchange rate changes? GITTE a. Compute the sales prices per unit of engine in euros for the three-year penod in the following table: (Hound to two decimal places.) Date Price (millions of pounds, £) Spot rate (euro 1.00 pound) Price (millions of euros, E) View an example £ €
Question 3, Problem 12-8 (book/static) Part 1 of 6 £ € 1Q 2007 2Q 2007 22.50 £ 22.50 £ 1.4918 1,4733 33.57 € 3Q 2008 22.50 £ 1.2590 Etext pages € 4Q 2008 22.50 £ 1.1924 € 3Q 2007 22.50 E 1.4696 € 1Q 2009 22.50 £ 1.1017 Financial calculator € 4Q 2007 22.50 £ 1.4107 € 2Q 2009 22.50 E 1.1375 € HW Score: 0%, 0 of 10 points O Points: 0 of 3 1Q 2008 22.50 1.3198 3Q 2009 2Q 2008 £ 22.50 1.2617 € 4Q 2009 22.50 E 22.50 1.1467 1.1066 Save € Clear all Check answer In
vork: Chapter 12 work Data table urbine Engines Rolls-Royce is strucaling with its pricing strategy with a number of its maior customers in Continental Europe partic Date Price (millions of pounds, £) £ Spot rate (euro = 1.00 pound) Price (millions of euros, €) Date Price (millions of pounds, £) Spot rate (euro = 1.00 pound) Price (millions of euros, €) e (euro = 1.00 pound) millions of euros, €) € example 1.2590 Etext pages € £
Question 3, Problem 12-8 (book/static) Part 1 of 6 € 33.57 € € 1Q 2007 2Q 2007 22.50 £ 22.50 £ 1.4918 1.4733 3Q 2008 4Q 2008 22.50 £ 22.50 £ 1.1924 1.2590 1.1924 € Print 1.1017 Financial calculator € 3Q 2007 22.50 £ 1.4696 1Q 2009 22.50 £ 1.1017 Done 1.1375 € 4Q 2007 22.50 1.4107 2Q 2009 HW Score: 0%, 0 of 10 points O Points: 0 of 3 1.1467 € £ 22.50 £ 1.1375 € 1Q 2008 2Q 2008 22.50 1.3198 £ 22.50 1.2617 3Q 2009 22.50 1.1467 1.1066 £ Clear all 4Q 2009 22.50 1.1066 Che
gines. Rolls-Royce is struggling with its pricing strategy with a number of its major customers in Continental Europe, ompany with most manufacturing of the Airbus engines in the United Kingdom, costs are predominantly denominated Data table ble Date Price (in millions of pounds, £) Spot rate (€/£) Price (in millions of euros, €) Sales volume (engines) Total cost to Airbus (millions of €) Total revenue to RR (millions of £) pounds, 2) 1.00 pound) euros, €) E 22.50 2 22.50 £ 1.2590 1.1924 Etext pages € £ € € £ Print 22.50 1.1017 Financial calculator 1Q 2007 € 22.50 £ 1.4918 33.57 € 200 6,714 € 4,500 £ 1Q 2008 Done 22.50 E 1.1375 € 22.50 £ 1.3198 29.70 € 220 6,534 € 4,950 £ 1Q 2009 % Chg 22.50 1.1017 24.79 240 5,950 5,400 22.50 E 22.50 1.1467 1.1066 % % 20.00 % % % Clear all - X