Suppose that Salem Co$,$ a U$.$S$.-$based MNC that both purchases supplies from Canada and sells exports in Canada, is seeking to measure the economic

exposure of its cash flows. Salem wishes to analyze how its cash flows might change under different exchange rates for the Canadian dollar $($the only

foreign currency in which it deals$).$

Salem estimates it's cash flows from both the U$.$S$.,$ in dollars, and Canada, in Canadian dollars. These figures are summarized in the following table.

Salem believes that the value of the Canadian dollar will be $$0\mathrm{.}70,$$$0\mathrm{.}75,$ or $$0\mathrm{.}80,$ and seeks to analyze its cash flows under each of these scenarios.

The following table shows Salem's cash flows under each of these exchange rates.