A us company sells goods to a canadian company for 8


A U.S. company sells goods to a Canadian company for 8 million Canadian dollars, purchases supplies from Canadian companies for 7 million Canadian dollars, and incurs interest expense of 4 million Canadian dollars on Canadian loans. The exchange rate is C$/US$1.014. (1) Calculate the US$ value of the company's cash flows; (2) Would the US$ value of the cash flows increase or decrease with an exchange rate of C$/US$.98 and how much? Show how you derive your answers.

Request for Solution File

Ask an Expert for Answer!!
Financial Management: A us company sells goods to a canadian company for 8
Reference No:- TGS01418130

Expected delivery within 24 Hours