The Central Bank of Poland is about to engage in indirect intervention later today in which it
Question:
a. Explain how the impact on the zloty’s value will affect the sales of appliances by the Polish subsidiary.
b. The subsidiary owes a British company 1 million British pounds for some technology that the British company provided. Explain how the impact on the zloty’s value will affect the cost of this technology to the subsidiary.
c. The subsidiary plans to take 2 million zloty from its recent earnings and will remit it to the U.S. parent in the near future. Explain how the impact on the zloty’s value will affect the amount of dollar cash flows received by the U.S. parent due to this remittance of earnings by the subsidiary.
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