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\mathrm{.}60,(2)$ NZ$ $=$ $$0\mathrm{.}65,$ and $(3)$ NZ$ $=$ $$0\mathrm{.}70.($Assume U$.$S$.$ 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$.$

Business New Zealand Business

Sales $$950$ NZ$$100$

Cost of Materials $300400$

Operating Expenses $2000$

Interest Expense $1000$

Cash Flow $$350-$NZ$$300$

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$ $=$ $$0\mathrm{.}60$ NZ$ $=$ $$0\mathrm{.}65$ NZ$ $=$ $$0\mathrm{.}70$

Sales

U$.$S$.$ $ $950$ $ $950$ $ $950$

New Zealand NZ$$100=$

NZ$$100=$

NZ$$100=$

Total $

$

$

Cost of Materials

U$.$S$.$ $ $300$ $ $300$ $ $300$

New Zealand NZ$$400=$

NZ$$400=$

NZ$$400=$

Total $

$

$

Operating expenses $ $200$ $ $200$ $ $200$

Interest expenses $ $100$ $ $100$ $ $100$

Cash flow $

$

$

The preceding table shows that DeKalb Inc. is adversely affected by a

$-$Select$-$

New Zealand dollar value.