On the following graph, use the blue points (circle symbols) to plot the U.S. dollar cash flows from the original operating structure under both exchange rate scenarios $0.75 and $0.85. Then use the orange points (square symbols) to plot the U.S. dollar cash flows from the proposed operating structure under both exchange rate scenarios $0.75 and $0.85. Plot the points from left to right in the order you want them to appear. Line segments will connect automatically. Cash Flows (Millions of Dollars) 90 100 110 80 0.70 120 0.75 0.80 0.85 Exchange Rate Scenario (U.S. Dollars per Canadian Dollar) ° Original Operating Structure Proposed Operating Structure ? Because the line for the proposed operating structure is flatter the U.S. dollar cash flows in the proposed operating structure are . less sensitive to changes in the exchange rate of the Canadian dollar when compared with the U.S. dollar cash flows of the original operating structure.
On the following graph, use the blue points (circle symbols) to plot the U.S. dollar cash flows from the original operating structure under both exchange rate scenarios $0.75 and $0.85. Then use the orange points (square symbols) to plot the U.S. dollar cash flows from the proposed operating structure under both exchange rate scenarios $0.75 and $0.85. Plot the points from left to right in the order you want them to appear. Line segments will connect automatically. Cash Flows (Millions of Dollars) 90 100 110 80 0.70 120 0.75 0.80 0.85 Exchange Rate Scenario (U.S. Dollars per Canadian Dollar) ° Original Operating Structure Proposed Operating Structure ? Because the line for the proposed operating structure is flatter the U.S. dollar cash flows in the proposed operating structure are . less sensitive to changes in the exchange rate of the Canadian dollar when compared with the U.S. dollar cash flows of the original operating structure.
Chapter4: Exchange Rate Determination
Section: Chapter Questions
Problem 1ST
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Transcribed Image Text:On the following graph, use the blue points (circle symbols) to plot the U.S. dollar cash flows from the original operating structure under both
exchange rate scenarios $0.75 and $0.85. Then use the orange points (square symbols) to plot the U.S. dollar cash flows from the proposed
operating structure under both exchange rate scenarios $0.75 and $0.85. Plot the points from left to right in the order you want them to appear.
Line segments will connect automatically.
Cash Flows (Millions of Dollars)
90
100
110
80
0.70
120
0.75
0.80
0.85
Exchange Rate Scenario (U.S. Dollars per Canadian Dollar)
°
Original Operating Structure
Proposed Operating Structure
?
Because the line for the proposed operating structure is flatter
the U.S. dollar cash flows in the proposed operating structure are
.
less sensitive to changes in the exchange rate of the Canadian dollar when compared with the U.S. dollar cash flows of the original
operating structure.
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