Dengo Co. expects to receive 50 million INR in each of the next 7 years. It will need to obtain 5 million Mexican pesos in each of the next 7 years. The INR exchange rate is presently valued at BDT 0.85 and is expected to depreciate by 2 percent each year over time. The peso is valued at BDT 1.13 and is expected to appreciate by 2 percent each year over time. Review the valuation equation for an MNC. Do you think that the exchange rate movements will have a favorable or unfavorable effect on the MNC?
Dengo Co. expects to receive 50 million INR in each of the next 7 years. It will need to obtain 5 million Mexican pesos in each of the next 7 years. The INR exchange rate is presently valued at BDT 0.85 and is expected to depreciate by 2 percent each year over time. The peso is valued at BDT 1.13 and is expected to appreciate by 2 percent each year over time. Review the valuation equation for an MNC. Do you think that the exchange rate movements will have a favorable or unfavorable effect on the MNC?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Dengo Co. expects to receive 50 million INR in each of the next 7 years. It will need to
obtain 5 million Mexican pesos in each of the next 7 years. The INR exchange rate is
presently valued at BDT 0.85 and is expected to
The peso is valued at BDT 1.13 and is expected to appreciate by 2 percent each year over
time. Review the valuation equation for an MNC. Do you think that the exchange rate
movements will have a favorable or unfavorable effect on the MNC?
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