Question
c. PQR Inc. a German based company expects to receive 10 million Norweigian krona (NOK) in each of the next 10 years. At the same
c. PQR Inc. a German based company expects to receive 10 million Norweigian krona (NOK) in each of the next 10 years. At the same time the company needs to obtain 2 million Australian dollars in each of the next 10 years. The Norweigian krona exchange rate is presently valued at 1.48 and is expected to depreciate by 3 percent each year over time. The A$ is valued at 0.89 and is expected to depreciate by 2.5 percent each year over time. Do you think that the exchange rate movements will have a favourable or unfavourable effect on PQR Inc. Justify your answer with an appropriate analysis. (10 marks)
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