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5. (17 points) (Ch. 10) Measuring Economic Exposure. Using the following cost and revenue information shown for Kiwi Family Inc., a U.S.-based company, determine how
5. (17 points) (Ch. 10) Measuring Economic Exposure. Using the following cost and revenue information shown for Kiwi Family Inc., a U.S.-based company, determine how the costs, revenue, and earnings items would be affected by three possible exchange rate scenarios for the New Zealand dollar against the U.S. dollar ("NZDUSD"): (1) 0.50 , (2) 0.55 , and (3) 0.60. (Assume sales and costs will be unaffected by the exchange rate.) Assume that NZD earnings will be remitted to the U.S. parent company at the end of the period and there are no taxes. Revenue and Cost Estimates: Kiwi Family Inc. (in millions of USD and NZD) From its parent company's (located in the U.S.) perspective, Does the Kiwi Family behave like an exporter or an importer? Why? (17 points)
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