Question: need help with part 3. Problem 3 Intro Cargill is a U.S. firms producing cattle feed. It imports soy beans from Brazil and also sell


Problem 3 Intro Cargill is a U.S. firms producing cattle feed. It imports soy beans from Brazil and also sell some products there. The company expects the following cash flows: . U.S. sales of $310 million U.S. cost of goods sold of $62 million U.S. interest expenses of $30 million Selling, general and administrative expenses of $20 million Brazilian sales of R$160 million Brazilian cost of goods sold of R$740 million Brazilian interest expenses of R$10 million The company expects the Brazilian real exchange rate to take on one of three possible values: $0.21 per real, $0.23 per real, or $0.25 per real. Part 1 Attempt 2/10 for 10 pts. What is the cash flow before taxes if the exchange rate turns out to be $0.25 per euro (in $ million)? 50,5 Correct All numbers in million, except exchange rates Exchange rate scenario R$_$0.21 R$_$0.23 RS $0.25 R$ $0.23 R$ = $0.25 $310 $310 $36.8 $346.8 $40 $350 All numbers in million, except exchange rates Exchange rate scenario R$ - $0.21 Sales U.S. sales $310 Brazilian sales (R$160) $33.6 Total sales $343.6 Costs & expenses U.S. costs $62 Brazilian costs (R$740) $155.4 Total costs $217.4 Expenses $20 Interest expenses U.S. interest expenses $30 Real interest expenses (R$10) $2.1 Total interest expenses $32.1 Cash flow before taxes $74.1 $62 $62 $170.2 $185 $232.2 $247 $20 $20 $30 $2.3 $32.3 $62.3 $30 $2.5 $32.5 $50.5 Part 2 Attempt 5/5 for 0 pts. What could the company do to reduce its economic exposure to the real? Check all that apply: Increase sales in Brazil x (missed) Inicima. Da accepi.com Accepi My courses > BU4720 > Managing Economic Exposure ... the company's cash outfiows than its cash inflows. Therefore, the company can do the following to balance the mismatch: Hedge its real transactions Reduce imports in real Increase sales in real Restructure debt to reduce debt payments in real Part 3 Attempt 1/10 for 10 pts. The company decided to restructure its business to reduce its exposure to the real exchange rate. In particular, the company decided to do the following: Increase sales efforts to reach Brazilian cattle farmers, increasing real sales to 203 million, while also increasing selling expenses to $25. . Buy more soy beans in America, reducing Brazilian cost of goods sold to 720 million and increasing U.S. cost of goods sold to $67 million. Borrow more dollars to pay off some real debt, decreasing real interest expenses to 0 milion and increasing dollar interest expenses to $32.3 million. What is the cash flow before taxes if the exchange rate turns out to be $0.25 per euro (in $ million)? 0+ decimals Submit
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