PHL company is a U.S. sales company are somewhat affected by the value of the New Zealand dollar (NZ$), because it faces competition from New Zealand exporters. Below are the details of transactions for the PL company throughout the year: 

(i) PHL has forecasted sales in the New Zealand dollar revenue invoiced in New Zealand dollars are expected to be NZ$700. 

(ii) Its cost of materials is estimated is $200 million from purchase of U.S. materials and NZ$100 million from the purchase of New Zealand materials. 

(iii) Fixed cost is estimated at $50 million. 

(iv) Variable operating expenses are estimated at 10 percent of total sales after include New Zealand sales which translated to a dollar amount. 

Three scenarios and the expected value for the upcoming scenarios are as follows: 

Forecast the net cash flow for PHL Company under each three scenarios.

Transcribed Image Text:

Scenario Effect of the Average value of NZ$ Revenue from U.S Business (in million) $100 $200 $400 average value of NZ$ $0.6398 Depreciate by 5% $0.5790 $0.5240 23 Scenario Effect of the Average value of NZ$ Revenue from U.S Business (in million) $100 $200 $400 average value of NZ$ $0.6398 Depreciate by 5% $0.5790 $0.5240 23