The Central Bank of Poland is about to engage in indirect intervention later today, in

which it will lower Poland$$s interest rates substantially. This will have an impact on

the value of the Polish currency $($zloty$)$ against most currencies because it will

immediately affect capital flows. Nevada Co$.$ has a subsidiary in Poland that sells

appliances. The demand for its appliances is not affected much by the local economy.

Most of its appliances produced in Poland are typically invoiced in zloty and are

purchased by consumers from Germany. The subsidiary$$s main competition is from

appliance producers in Portugal, Spain, and Italy that also export appliances to

Germany.

i$.$ Explain how the impact on the zloty$$s value will affect the sales of

appliances by the Polish subsidiary

ii$.$ The subsidiary owes a British company $1$ million British pounds for some

technology that the British company provided. Explain how the impact on

the zloty$$s value will affect the cost of this technology to the subsidiary.

iii. The subsidiary plans to take $2$ million zloty from its recent earnings, and

will remit it to the U$.$S$.$ parent in the near future. Explain how the impact on

the zloty$$s value will affect the amount of dollar cash flows received by the

U$.$S$.$ parent due to this remittance of earnings by the subsidiary.