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Ozzie Nuts Pty Ltd Import Walnuts from California at a Landed

Question 41

Multiple Choice

Ozzie Nuts Pty Ltd import walnuts from California at a landed cost of US$25.00 per case and sell 10 000 cases per year at A$30.00.Currently the exchange rate is AUD$1 = USD$0.9000 and the company's gross profit would be A$22 222 for a year at this exchange rate.Experts are predicting that the exchange rate will fall to USD$0.8300.If the experts are correct,what will happen to Ozzie Nuts' full year gross profit if the selling price remains unchanged?


A) Gross profit will not change.
B) Gross profit will increase by A$23 428.
C) Gross profit will fall to A$1205.
D) The company will make a loss on the transactions.
E) The company will continue to make a profit.

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