2 If the net baht received from the Thailand operation are invested in Thailand, how will Australian operations be affected? (Assume that Aussie Blades is currently paying 10 per cent on Australian dollars borrowed and needs more financing for the company.)

As a financial analyst for Aussie Blades, Pty Ltd, you are reasonably satisfied with Aussie Blades’ current set-up of exporting ‘Speedos’ (rollerblades) to Thailand. Due to the unique arrangement with Aussie Blades’ primary customer in Thailand, forecasting the revenue to be generated there is a relatively easy task. Specifically, your customer has agreed to purchase 180,000 pairs of Speedos annually, for a period of three years, at a price of THB4594 per pair. The current direct quotation of the Australian dollar–baht exchange rate is A$0.0.0381.
The cost of goods sold incurred in Thailand (due to imports of the rubber and plastic components from Thailand) runs at approximately THB2871 per pair of Speedos, but Aussie Blades currently only imports materials sufficient to manufacture about 72,000 pairs of Speedos. Aussie Blades’ primary reasons for using a Thai supplier are the high quality of the components and the low cost, which has been facilitated by a continuing depreciation of the Thai baht against the Australian dollar.