Perth International anticipates a 4.68 per centincrease in the year-one income of itssubsidiaries in year-two. It has information thatthe current 5.22 per cent, 8.43 per cent, 13.74per cent and 11.63 per cent nominal interest ratein Australia, China, India and Malaysia,respectively, will remain the same in the nextthree years. Due to foreign currency highernominal interest rate, subsidiaries will invest 21per cent, 53 per cent and 39 per cent of theiryear-two earnings in China, India and Malaysia,respectively, for next year. Subsidiaries willremit their remaining incomes (i.e., afterinvestment) to the Australian parent. PerthInternational believes in the International FisherEffects with considering a 2.20 per cent realinterest in Australia, China, India and Malaysia tocalculate the expected foreign currency valueagainst the Australian dollar for year-two basedon the year-one exchange rates A$/CNY, A$/INR,and A$/MYR.What is the total Australian dollar (A$) cash flowfor year-two? (enter the whole number with nosign or symbol)

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Answered: Perth International anticipates a 4.68…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

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Perth International anticipates a 4.68 per cent increase in the year-one income of its subsidiaries in year-two. It has information that the current 5.22 per cent, 8.43 per cent, 13.74 per cent and 11.63 per cent nominal interest rate in Australia, China, India and Malaysia,