Assume that Live Co. has expected cash flows of $200,000 from domestic operations, SF200,000 from Swiss operations, and 150,000 euros from Italian operations at the end of the year. The Swiss franc's value and euro's value are expected to be $.83 and $1.29 respectively, at the end this year. What are the expected dollar cash flows of Live Co?
A) $200,000
B) $559,500
C) $582,500
D) $393,500

Question

Quizplus · Accepted Answer

The expected dollar cash flows of Live Co. are $559,500. This is calculated by multiplying the expected cash flows from each operation by the expected exchange rate at the end of the year.$200,000 x 1 = $200,000SF200,000 x 0.83 = $166,000150,000 euros x 1.29 = $193,500$200,000 + $166,000 + $193,500 = $559,500

Assume That Live Co