7257 - Problem 1.7 Luzon's EPS Sensitivity to Exchange Rates(A Assume a major political crisis wracks Brazil The Brazilian reais falls in value from

7257 - Problem 1.7 Luzon's EPS Sensitivity to Exchange...

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Problem 1.7 Luzon's EPS Sensitivity to Exchange Rates (A)Assume a major political crisis wracks Brazil. The Brazilian reais falls in value from R$1.8000/$ to R$3.0000/$. How are Luzon's consolidated global earnings affected by the fall in the value of the Brazilian reais? US Parent Brazilian German Chinese Company Subsidiar y Subsidiar y Subsidiar y Business Performance (000s) (US$) (reais, R$) (euros, €) (yuan, Y) Earnings before taxes, EBT (local currency) 4,500.00 6,250.00 4,500.00 2,500.00 Less corporate income taxes
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