Question

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)

Answer 1

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