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Please answer with clear explanation. Thank you! Green Sustainable Finance LLC is based in the U.S. with two subsidiaries, one located in the UK, and

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Green Sustainable Finance LLC is based in the U.S. with two subsidiaries, one located in the UK, and other in Norway. The U.S dollar has been depreciating against the Euro. The British pound has been appreciating against the U.S. dollar. The U.S. parent company exports their main merchandise, luxury trams, in USD. The British subsidiary exports both in USD and in Euro. The Norwegian subsidiary exports predominantly in Euro. Information about the British subsidiary operations are provided as follows: Working capital is expected to stay the same for the next 2 years (2022-2023). Tax rate 30% The foreign exchange rate changed from $1.75/ to $2/ in early 2022 and is expected to remain the same for the next two years. The weighted average cost of capital is 15%. (a) Why would Green Sustainable Finance LLC open a subsidiary overseas? Explain your answer with a brief example for each factor you find important. [2.5 marks] (b) Provide an analysis of the potential effect of the change in exchange rate for the U.S. parent company, and the British and Norwegian subsidiaries. You can assume the above rates [ 3 marks] (c) Assuming you need to provide a forecast for the next two years, evaluate the effect of the following scenarios on the potential net present value ($) 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%. [5 marks] (d) Why would you recommend a risk share agreement if you are a Canadian multinational, and you are exporting to the UAE? Explain your answer. [2 marks]

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