Using the following cost and revenue information shown for DeKalb, Inc., determine how the costs, revenue, and cash flow items would be affected by three possible exchange rate scenarios for the New Zealand dollar (NZ$):

(1) NZ$ = $.50,

(2) NZ$ = $.55, and

(3) NZ$ = $.60. (Assume U.S. sales will be unaffected by the exchange rate.)

Assume that NZ$ earnings will be remitted to the U.S. parent at the end of the period. Ignore possible taxeffects.

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Revenue and Cost Estimates: DeKalb, Inc. (In Millions of U.S. Dollars and New Zealand Dollars) New Zealand Business U.S. Business Sales Cost of materials Operating expenses Interest expense Cash flow $800 500 300 100 -$100 NZ$800 100 NZS700