Salem believes that the value of the Canadian dollar will be $0.80, $0.85, or $0.90, and seeks to analyze its cash flows under each of these scenarios.

The following table shows Salems cash flows under each of these exchange rates.

For each exchange rate scenario, fill in rows (2), (3), (5), (6), (9), and (10). Finally, fill in the last row for net cash flows in U.S. dollars for each exchange rate.

	Exchange Rate Scenario		Exchange Rate Scenario		Exchange Rate Scenario
	C$1=$0.80		C$1=$0.85		C$1=$0.90
	(Millions)		(Millions)		(Millions)
Sales
(1) U.S. Sales	$320		$320		$320
(2) Canadian Sales	C$4 = $		C$4 =$3.40		C$4 = $
(3) Total Sales in U.S. $	$		$323.40		$
Cost of Materials and Operating Expenses
(4) U.S. Cost of Materials	$50		$50		$50
(5) Canadian Cost of Materials	C$150 = $		C$150 = $127.50		C$150 = $
(6) Total Cost of Materials in U.S. $	$		$177.50		$
(7) Operating Expenses	$60		$60		$60
Interest Expense
(8) U.S. Interest Expense	$3		$3		$3
(9)Canadian Interest Expense	C$10 = $		C$10 = $8.50		C$10 = $
(10) Total Interest Expenses in U.S.	$		$11.50		$
Cash Flows in U.S.$ before Taxes	$		$74.40		$