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.

Answer: M$120 million decrease

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