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answer i ii ii pls a. You are the owner of Victory Corporation that selling car in United States. Assume you have a subsidiary in
answer i ii ii pls
a. You are the owner of Victory Corporation that selling car in United States. Assume you have a subsidiary in Japan. The subsidiary sells car to local consumers in Japan who buy the car using mostly borrowed funds from local banks. Your subsidiary purchases all of its materials from Hong Kong. The Hong Kong dollar is tied to the U.S. dollar. Your subsidiary borrowed funds from the U.S. parent, and must pay the parent 50,000 in interest each month. Japan has just raised its interest rate (borrowing) in order to boost the value of its currency. The Japanaese Yen appreciates against the dollar as a result. Explain whether these actions would increase, reduce, or have no effect on: i. The volume of your subsidiary's sales in Japan (measured in Yen) (2 marks) ii. The cost to your subsidiary of purchasing materials (measured in Yen) (2 marks) iii. The cost to your subsidiary of making the interest payments to the U.S. parent (measured in Yen). (1 mark)
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