Question
Below are the forcasted gross margin for company A's foreign subsidiary, you are forcasting 25% devaluation of the local currency, calculate the subsidiary's local exposure
Below are the forcasted gross margin for company A's foreign subsidiary, you are forcasting 25% devaluation of the local currency, calculate the subsidiary's local exposure and it's potential loss in the event of the 25% devaluation of the local currency company
| company A | L.C. | Rate | US$ | |||
| Sales-L.C. | 625 | 0.4 | 250 | |||
| Sales-US$ | 125 | 0.4 | 50 | |||
| Sales-Total | 750 | 0.4 | 300 | |||
| COGS-L.C. | 425 | 0.4 | 170 | |||
| COGS-US$ | 250 | 0.4 | 100 | |||
| COGS-Total | 675 | 0.4 | 270 | |||
| Gross Margin | 75 | 0.4 | 30 |
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Liquidity Risk Management In Banks Economic And Regulatory Issues
Authors: Roberto Ruozi, Pierpaolo Ferrari
1st Edition
3642295800, 978-3642295805
