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Multinational Valuation Model - Suppose that, at the end of the next period t, a U.S.-based MNC parent named California Co. expects to receive cash
Multinational Valuation Model - Suppose that, at the end of the next period t, a U.S.-based MNC parent named California Co. expects to receive cash flows from its local business as well as from a subsidiary located in Mexico. At the end of time period t, the cash flow expected from the local business is expected to be $600,000 while the cash flow expected from the subsidiary in Mexico is expected to be 1,100,000 pesos. Assume the exchange rate for pesos is $0.08 per peso. The total expected cash flows received by this MNC at the end of period t, in dollars, is
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