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Toyota manufactures most of the vehicles it sells in the United Kingdom in Japan. The base platform for the Toyota Tundra truck line is ¥1,650,000. The spot rate of the Japanese yen against the British pound has recently moved from ¥197/£ to ¥190/£. How does this change the price of the Tundra to Toyota's British subsidiary in British pounds? Explain.

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vijayhalder031

When the spot rate of the Japanese yen against the British pound moves from ¥197/£ to ¥190/£. This change the price of the Tundra to Toyota's British subsidiary in British pounds by 3.68%.

Prices = 1,650,000

Exchange rates = ¥197/£

Change in exchange rate = ¥190/£

So, here Original price of the Toyota tundra is

                                   = 1,650,000 ÷ 197

                                    = 8375.63

New import price is = 1,650,000 ÷ 190

                              = 8,684.21

Percentage change in the price of the imported trucks should be

= ( New price - Old price) / old price *100                                                                                                                             = (8,684.21 - 8375.63) ÷ 8375.63                                                                                                                   = 3.68%

Hence , when the spot rate of the Japanese yen against the British pound moves from ¥197/£ to ¥190/£. This change the price of the Tundra to Toyota's British subsidiary in British pounds by 3.68%.

(This is the percentage change in the Japanese yen as the price of the truck remains unchanged).

Learn more about price here:

https://brainly.com/question/1153322

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