Assume that the exchange rate is the equilibrium initially (1 EUR =3.80 SAR). Over the next 3 months If home currency (SAUDI) experiences a 5 % inflation, while the foreign country (GERMANY) experiences a 7% inflation, according to relative purchasing power parity condition, what will be new exchange rate with clear steps?

DETERMINE THE CASH FLOW FROM THE FOLLOWING

REVENUE= 200,000

EXPENSES= 100,000

Depreciation= 10,000

Tax (30%)

EBT=?

EAT=?

CASHFLOW=?