Green Sustainable Finance LLC is based in the Us with two subsidiaries, one located in the UK, and Other in Norway. The U.S dollar has been depreciating against the Euro.

The snush pound nas occ

appreciating against the U.S. dollar. The U.S. parent company exports their main merchandise, luca trams, in USD. The British subsidiary exports both in USD and in Euro. The Norwegian subsicia

exports predominantly in Euro.

Information about the British subsidiary operations are provided as follows.

British Subsidiary information:

Sales volume

Sales price (p/u)

Direct cost (p/u)

Depreciation

Selling and administration expenses

Current Assets (2021)

Current Liabilities (2021)

3.000,000

12

3.5

600,000

1.300,000

1.200,000

800,000

1,100,000

Long term liabilities (2021)

Working capital is expected to stay the same for the next 2 years (2022-2023).

30%

Tax rate

The foreign exchange rate changed from $1.75/ to $2/ in early 2022 and is expected to remain the same for the next two years. The weighted average cost of capital is 15%.

• Assuming you need to provide a forecast for the next two years, evaluate the effect following scenarios on the potential net present value (S) of the British subsidiary
• No strategic change in the operations
• An increase in the selling price by 10% for each of the next 2 years.
• an increase in the volume by 15% with also a decrease in price by 5%.