Bronco Co. is a U. S.-based MNC that has subsidiaries in Spain and Germany. Both subsidiaries frequently remit their earnings back to the parent company. The Spain subsidiary generated a net outflow of €5,000,000 this year, while the German subsidiary generated a net inflow of €4,500,000. What is the net inflow or outflow as measured in U. S. dollars this year? The exchange rate for the euro is $1.159.

Question

Roberson

Business

3 May, 16:57

Bronco Co. is a U. S.-based MNC that has subsidiaries in Spain and Germany. Both subsidiaries frequently remit their earnings back to the parent company. The Spain subsidiary generated a net outflow of €5,000,000 this year, while the German subsidiary generated a net inflow of €4,500,000. What is the net inflow or outflow as measured in U. S. dollars this year? The exchange rate for the euro is $1.159.

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Amiya Patterson · Answer 1

Inflow in US = €5,000,000

Outflow from US=4,500,000

Net Inflow = 5,000,000-4,500,000

=€500,000

One euro = $1.159

Net inflow in US dollars = 500,000*1.159=$579,500