Intervention Effects on Corporate Performance. Assume you have a subsidiary in Australia. The subsidiary sells mobile homes to local consumers in Australia, who buy the homes using mostly borrowed funds from local banks. Your subsidiary purchases all of its materials from Hong Kong. The Hong Kong dollar is tied to the U.S. dollar. Your subsidiary borrowed funds from the U.S. parent, and must pay the parent US$200,000 in interest each month. Australia has just increased its interest rate in order to curb domestic consumption, and the value of its currency increases (Australian dollar, A$). In each case below state whether these actions would increase, decrease, or have no effect on the following:

a. The volume of your subsidiarys sales in Australia (measured in A$) 4 Marks

b. The cost to your subsidiary of purchasing materials (measured in A$) 4 Marks

c. The cost to your subsidiary of making the interest payments to the U.S. parent (measured in A$). 4 Marks

Also, briefly explain why in each answer.