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I need the detail answer and explanation of these questions. Thank you so much. Maple Leaf Canada (MLC) is a Canadian sightseeing agency that offers

I need the detail answer and explanation of these questions. Thank you so much.

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Maple Leaf Canada (MLC) is a Canadian sightseeing agency that offers holiday packages to the Canadian tourists. Until recently, all of its businesses were in Canada. It just established a subsidiary in Kota Kinabalu (KK), Sabah, which provides tour services in the Sabah islands for Canadian tourists. It rented a shop near the port of KK. It also hired residents of KK who could speak English and provide tours of the Sabah islands. The subsidiary's main costs are rent and salaries for its employees and the leasing of a few large boats in KK that use for the tours. The Canadian tourists pay for the entire tour in Canadian Dollar (CAD) at MLC main office in Toronto before they depart for Sabah. Required: (i) Determine the MLC's cash outflows and cash inflows and explain if these cash flows are favorably or unfavorably affected when the MYR appreciates against the CAD? (5 marks) (ii) MLC plans to finance its Sabah tour business. Its subsidiary may possibly get loans in MYR from a bank in Sabaand its main office in Toronto could pay off the loans over time. Alternatively, the main office could borrow the CAD and might periodically convert the CAD to MYR to pay the expenses in Sabah. Does either type of loan reduce the exposure of MLC to the appreciation of MYR? Explain. (6 marks) (iii) Is there any reason to believe that MLC should have lower and better cost of capital than Canadian domestic firms? Explain THREE (3) reasons to support your statement. (7 marks)

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