It is known that the British pound and euro are highly correlated. A U. S firm anticipates the equivalent of $1 million cash outflows in euro and the equivalent of $1 million cash outflows in pounds, During a cycle the firm is affected by its exposure strong dollar, not weak dollar; favorably strong dollar; favorably weak dollar; not When the dollar strengthens, the reported consolidated earnings of U. S based MNCs are affected by translation exposure When the dollar weakens, the reported consolidated earning are affected. unfavorably; favorably affected favorably; unfavorably affected favorably; favorably affected by a higher degree favorably; favorably affected but by a smaller degree subsidiary A of dollars of Mega corporation has net inflows in Australian dollars of A $1,000,000, while Subsidiary B has outflows in Australian dollars of A $1, 500,000. The expected exchange rate of the Australian dollar is $.50. what is the net inflow or outflow as measured in U.S. dollars? $250,000 outflow $250,000 inflow $275,000 inflow $275,000 outflow A firm produces goods for which substitute goods are produced in all countries. Appreciation of the firm's local currency should: decrease the firm's exports denominated in the local currency. increase the returns earned on the firm's foreign bank deposits. increase local sales as it reduces foreign competition in local markets increase the firm's cash outflow required to pay for imported supplies denominated in a foreign currency