Consider a U.S.-based MNC parent, Triloo Inc., that owns subsidiaries in the France, Mexico, and Australia. Suppose that the economy in Australia weakens, leading to a lower national income.

This lower national income in Australia will most likely ______(increase or decrease) the demand for Triloo products, leading to______(lower or higher) expected cash flows denoted in australian dollars and _____________( an increase or a decrease) in the value of Triloo Inc. This example is best classified as a case of exposure to

______ (international economic conditions or international political risk, or exchange rate risk)

. Suppose that Triloo Inc. expects cash flows from its French subsidiaries of 14,000,000 euros at the end of the current time period. Management at Triloo forecasts the exchange rate to be $1.80 per euro at the end of this time period.

This means that Triloo will have an estimated __________( $32,762,000 or $30,240,000 or $25,200,000 or $27,720,000) in cash flows from French subsidiaries at the end of the current time period.

Suppose that, after further analysis, management at Triloo now forecasts the euro to weaken against the dollar. Triloo expects the exchange rate at the end of the current time period to be $1.50 per euro.

This means that Triloo will now have an estimated _________ ($14,700,000 OR $21,000,000 OR $27,300,000 OR $25,200,000) ( in cash flows from French subsidiaries, which represents a decrease ________ ($5,040,000 OR $2,940,000 OR $5,460,000 PR $4,200,000) of from the companys original forecast.