If the Country M S depreciated by 10% what would be the increase or decrease in the MS valuation of the subsidiary?

CORRECT TEXT

A company in Country M owns a subsidiary in Country O valued at OS200 million. The rate of exchange between the Country M dollar (M$) and the Country O dollar (OS) is OS1 – MS6

If the Country M S depreciated by 10% what would be the increase or decrease in the MS valuation of the subsidiary?

Give your answer in whole millions and indicate whether it is an increase or decrease.

View Answer

Answer: M$120 million decrease