Question

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.

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

Step-by-step explanation: