Show transcribed data 50% 20% CS1 = $.80 CS1 = $.85 Assume a company has the following results of operations under 3 exchange rate scenarios Probability 30% C$1 = 9.75 Sales U.S. Sales 320 Canadian Sales C$ 4 3 Total sales in US Dollars 323 320 3.2 323.2 320 3.4 323.4 Cost of Materials and Operating Expenses U.S. Cost of materials Canadian cost of materials C$200 Total cost of materials in US Dollars Operating Expenses (all US$) Interest Expenses U.S. interest Expense Canadian Interest Expense Total interest expense in US Dollars 50 150 200 60 50 160 210 60 50 170 220 60 Co w 7.5 10.5 8 11 3 8.5 11.5 Cash flows in US $ before taxes 52.5 42.2 31.9 Rework the above data under the following restructuring scenario: Canadian sales are increased by 50% in C$ Operations are shifted from Canada to US and thus Canadian Cost of Goods Sold goes from C$200 to C$150 but US Cost of Goods Sold goes up by $35 Operating Expenses rise by $5 to pay for advertising to generate more Canadian Sales as discussed above Does this restructure help reduce the deviation in earnings subject to Canadian - US exchange rate?