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Need the answer to b (6) Using the following cost and revenue information shown for DeKalb, Inc., determine how the costs, revenue, and cash flow
Need the answer to b
(6) Using the following cost and revenue information shown for DeKalb, Inc., determine how the costs, revenue, and cash flow would be affected by three possible exchange rate scenarios for the New Zealand dollar (NZ$): (1) NZ$ = $0.70, (2) NZ$ = $0.75, and (3) NZ$ = $0.80. (Assume U.S. sales will be unaffected by the exchange rate) Assume that NZ$ earnings will be remitted to the U.S. parent at the end of the period. Ignore possible tax effects (20 points). Forecasted Net Cash Flows: DeKalb Inc. (in millions of U.S. dollars and New Zealand dollars) Sales Cost of Materials Operating Expenses Interest Expense Cash Flow U.S. Business $1000 600 500 200 -$300 New Zealand Business NZ$900 300 0 0 NZ$600 Step by Step Solution
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