Americo's Earnings and the Fall of the Dollar. Americo is a U.S.-based multinational manufacturing firm with wholly-owned subsidiaries in Brazil, Germany, and China, in addition to domestic operations in the United States. Americo is traded on the NASDAQ. Americo currently has

651,000

shares outstanding. The basic operating characteristics of the various business units are as follows:(Click on

the

icon to import the table into a spreadsheet.)

Business Performance (000s)	U.S. Parent (US$)	Brazilian Subsidiary (R$)	German Subsidiary ()	Chinese Subsidiary ()
Earnings before taxes (EBT)	$4,440	R$6,310	4,520	2,600
Corporate income tax rate	21%	25%	40%	30%
Average exchange rate for the period		R$1.7748/$	0.7684/$	7.7303/$

Americo must pay corporate income tax in each country in which it currently has operations.

a. After deducting taxes in each country, what are Americo's consolidated earnings and consolidated earnings per share in U.S. dollars?

The dollar has experienced significant swings in value against most of the world's currencies in recent years.

b. What would be the impact on Americo's consolidated EPS if all foreign currencies were to appreciate

21%

against the U.S. dollar?

c. What would be the impact on Americo's consolidated EPS if all foreign currencies were to depreciate

21%

against the U.S. dollar?