What is the total australian dollar cash flow

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Reference no: EM132691466

Question - In year-three, Perth International has a plan to expand the business in China, India and Malaysia. Consequently, it forecasts an 8.78 per cent increase in year-one earnings of its subsidiaries in year-three. Perth International anticipates 3.51 per cent, 7.26 per cent, 11.14 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.

Note that investment of subsidiaries in year-two will be matured in this year and include these investment proceeds to the year-three cash flow. It means each subsidiary's year-three cash flow is year-three earnings and year-two investment proceeds.

What is the total Australian dollar (A$) cash flow for year-three?

Reference no: EM132691466

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