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Alao opens a subsidiary in New Zealand and its main business is to distribute electric cars in New Zealand. However, you remind the manager that

Alao opens a subsidiary in New Zealand and its main business is to distribute electric cars in New Zealand. However, you remind the manager that EV Direct is still subject to translation exposure. The subsidiary in New Zealand has an asset of NZD 2.5 billion and a liability of NZD 1.5 billion. If the exchange rate were to change from AUD 0.88/NZD to AUD 0.85/NZD, what would be the gain in AUD billion?

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