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Using the cost and revenue information shown for DeKalb, Inc., determine how the costs, revenue, and cash flow items would be affected by three possible

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Using the cost and revenue information shown for DeKalb, Inc., determine how the costs, revenue, and cash flow items would be affected by three possible exchange rate scenarios for the New Zealand dollar (NZ$): (1) NZ$ = $0.65, (2) NZ$ - $0.70, and (3) NZ$ = $0.75. (Assume U.S. sales will be unaffected by the exchange rate.) REVENUE AND COST ESTIMATES: DEKALB, INC. (IN MILLIONS OF U.S. DOLLARS AND NEW ZEALAND DOLLARS) U.S. New Zealand Business Business Sales $900 NZ$900 Cost of Materials 550 200 Operating 400 Expenses Interest Expense 100 Cash Flow -$150 NZ$700 Assume that NZ$ earnings will be remitted to the U.S.parent at the end of the period. Ignore possible tax effects. Round your answers to the nearest dollar NZS - $0.65 NZS - $0.70 NZS $0.75 Sales US 900 $ 900 900 New Zealand NZ$900- N25900 N25900 Total 0 0 $ $ $ $ Cost of Materials Cash Flow -$150 NZ$700 Assume that NZ$ earnings will be remitted to the U.S. parent at the end of the period. Ignore possible tax effects. Round your answers to the nearest dollar NZ$ - $0.65 NZ$ $0.70 NZS - $0.75 Sales U.S. $ 900 $ 900 $ 900 NZ$900 - New Zealand Total NZ$900 - NZ$900 - $ $ Cost of Materials US New Zealand Total $ 550 $ 550 $ 550 NZ$200 = NZ$200 NZ$200 $ $ Operating expenses Interest expenses Cash now 400 100 $ $ $ $ 400 100 400 100 $ 5 The preceding table shows that Dekalb Inc. is adversely affected by -Subs New Zealand dollar value. weaker strong

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