Finance and Accounting

1. Crusader Co. expects to receive 20 millioneuros in each of the next 10 years. It will need to obtain 4 million Mexican pesos in each of the next 10 years. The euro exchange rate is presently valued at $1.38 and is expected to depreciate by 3 percent each year over time. The peso is valued at $.13 and is expected to depreciate by 3 percent each year over time. Review the valuation equation for an MNC. Do you think that the exchange rate movements will have a favorable or unfavorable effect on the MNC?