In: Finance
Perth International Co., an Australian multinational company,
forecasts 66 million Australian dollars (A$) earnings next year...
- Perth International Co., an Australian multinational company,
forecasts 66 million Australian dollars (A$) earnings next year
(i.e., year-one). It expects 52 million Chinese yuan (CNY), 49
million Indian rupees (INR) and 35 million Malaysian ringgit (MYR)
proceeds of its three subsidiaries in year-one. It also forecasts
the year-one exchange rates A$0.3274/CNY, A$0.0441/INR and
A$0.6657/MYR.
Calculate the total Australian dollar (A$) cash flow for
year-one.
The answer for this question is $108485200
- Perth International anticipates a 5.55 per cent increase in the
year-one income of its subsidiaries in year-two. It has information
that the current 5.63 per cent, 8.27 per cent, 13.90 per cent and
11.71 per cent nominal interest rate in Australia, China, India and
Malaysia, respectively, will remain the same in the next three
years. Due to foreign currency higher nominal interest rate,
subsidiaries will invest 20 per cent, 55 per cent and 36 per cent
of their year-two earnings in China, India and Malaysia,
respectively, for next year. Subsidiaries will remit their
remaining incomes (i.e., after investment) to the Australian
parent. Perth International believes in the International Fisher
Effects with considering a 2.69 per cent real interest in
Australia, China, India and Malaysia to calculate the expected
foreign currency value against the Australian dollar for year-two
based on the year-one exchange rates A$/CNY, A$/INR, and
A$/MYR.
What is the total Australian dollar
(A$) cash flow for year-two? (Enter the whole number with no sign
or symbol)
- In year-three, Perth International has a plan to expand the
business in China, India and Malaysia. Consequently, it forecasts
an 9.97 per cent increase in year-one earnings of its subsidiaries
in year-three. Perth International anticipates 3.64 per cent, 7.70
per cent, 11.47 per cent and 9.44 per cent inflation in Australia,
China, Indian and Malaysia, respectively, in year-three. It
considers the Purchasing power parity to calculate the value of
CNY, INR and MYR against the Australian dollar in year-three using
the year-two exchange rates A$/CNY, A$/INR, and A$/MYR.
What is the total Australian dollar
(A$) cash flow for year-three? (enter the whole number with no sign
or symbol)
- The subsidiaries of Perth International remit their earnings
and investment proceeds to the Australian parent at the end of each
year. The annual weighted average cost of capital or required rate
of return of Perth International is 6.87 per cent.
Calculate the current value of the
Perth International Co. using its expected cash flows in year-one,
year-two and year-three. (enter the whole number with no sign or
symbol).
PLEASE PROVIDE NUMBERS AS WHOLE NOT
AFTER ROUNDING IN MILLIONS> FOR EXAMPLE I NEED IT LIKE
$21080125