Subsidiary A of Mega Corporation has net inflows in Australian dollars of A$1,000,000, while Subsidiary B has net outflows in Australian dollars of A$1,500,000. The expected exchange rate of the Australian dollar is $.55. What is the net inflow or outflow as measured in U.S. dollars?
A)$500,000 outflow.
B)$500,000 inflow.
C)$275,000 inflow.
D)$275,000 outflow.

Question

Quizplus · Accepted Answer

SOLUTION:
A$1,000,000 - A$1,500,000 = - A$500,000 × $.55 = - $275,000

Subsidiary a of Mega Corporation Has Net Inflows in Australian