Using the following cost and revenue information shown for DeKalb, Inc., determine how the costs, revenue, and
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Using the following 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$):
(1) NZ$ = $.50,
(2) NZ$ = $.55, and
(3) NZ$ = $.60. (Assume U.S. sales will be unaffected by the exchange rate.)
Assume that NZ$ earnings will be remitted to the U.S. parent at the end of the period. Ignore possible taxeffects.
Exchange RateThe value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...
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Revenue and Cost Estimates: DeKalb, Inc. (In Millions of U.S. Dollars and New Zealand Dollars) New Zealand Business U.S. Business Sales Cost of materials Operating expenses Interest expense Cash flow $800 500 300 100 -$100 NZ$800 100 NZS700
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Figures are in millions The preceding table shows that DeKalb ...View the full answer
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