6. Trident Europe: Case 4. Trident Europe (see Exhibit 10.3) decides not to change its domestic price

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6. Trident Europe: Case 4. Trident Europe (see Exhibit 10.3) decides not to change its domestic price of 12.80 per unit within Europe, but to raise its export price (in euros) from 12.80 per unit to 15.36 per unit, thus preserving its original dollar equiva- lent price of $15.36 per unit. Volume in both markets remains the same because no buyer perceives that the price has changed.

a. What is the impact on cash flow?

b. What is the impact on working capital needed?

c. What is the impact on the present value approach to measuring operating exposure?

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Fundamentals Of Multinational Finance

ISBN: 9780321541642

3rd Edition

Authors: Michael H. Moffett, Arthur I. Stonehill, David K. Eiteman

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