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Perth International Co
Perth International Co., an Australian multinational company, forecasts 69 million Australian dollars (A$) earnings next year (i.e., year-one). It expects 57 million Chinese yuan (CNY), 44 million Indian rupees (INR) and 36 million Malaysian ringgit (MYR) proceeds of its three subsidiaries in year-one. It also forecasts the year-one exchange rates A$0.3590/CNY, A$0.0383/INR and A$0.6234/MYR. Calculate the total Australian dollar (A$) cash flow for year-one. (enter the whole number with no sign or symbol)
Expert Solution
Proceeds in Chinese Yuan = 57 million CNY | Exchange rate = 0.3590 A $/CNY
Proceeds in Indian Rupees = 44 million INR | Exchange rate = 0.0383 A $/INR
Proceeds in Malaysian ringgit = 36 million MYR | Exchange rate = 0.6234 A $/MYR
CNY Proceeds in Australian Dollars = 57 million * 0.3590 = 20.463 million
INR Proceeds in Australian Dollars = 44 million * 0.0383 = 1.6852 million
MYR Proceeds in Australian Dollars = 36 million * 0.6234 = 22.4424 million
Perth International's own Earnings in Australian Dollars = 69 Million
Total Earnings in Australian Dollars from Subsidiaries = 20.463 + 1.6852 + 22.4424 = 44.5906 Million or 45 Million
Total Australian Dollar Cashflow for year-one = 69 Million + 45 Million = 114 Million
Hence, Total Australian Dollar cashflow for year-one is 114 Million
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