Subsidiary A of Mega Corporation has net outflows in Australian dollars of A$1,000,000, while Subsidiary B has net inflows 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?

net outflow is $275,000

Explanation:

given data

net outflows = $1,000,000

net inflows = $1,500,000

exchange rate = $.55

to find out

What is the net inflow or outflow as measured in U. S. dollars

solution

we get here net flow as measured in U. S. dollars that is express as

net flow = (net outflows - in outflows) * exchange rate ... 1

put here value we get

net flow = ($1000000 - $1500000) * 0.55

net flow = - $275,000

so net outflow is $275,000