Assume a major political crisis racks Brazil, first affecting the value of the Brazilian reais and, subsequently, inducing an economic recession within the country. What would be the impact on company's consolidated Net Income if the Brazilian reais were to fall in value to R$3.00/$, with all other earnings and exchange rates remaining the same?
Assume a major political crisis racks Brazil, first affecting the value of the Brazilian reais and, subsequently, inducing an economic recession within the country. What would be the impact on company's consolidated Net Income if, in addition to the fall in the value of the reais to R$3.00/$, earnings before taxes in Brazil fell as a result of the recession to R$5,8000,000?
The U.S. dollar has experienced significant swings in value against most of the world's currencies in recent years.
a. What would be the impact on consolidated Net Income if all foreign currencies were to appreciate 20% against the U.S. dollar?
b. What would be the impact on consolidated Net Income if all foreign currencies were to depreciate 20% against the U.S. dollar?