Question 1
How should appreciation of a company's home currency affect its cash inflows? How should depreciation of a company's home currency affect its cash inflows?
Exchange gains or losses for a company with subsidiaries resulting from translation of currency are non-cash flow items since they only involve changing one currency to another without movement of cash. Therefore, exchange losses and gains of companies with subsidiaries do not affect the cash inflow since they are non-cash items. However, an appreciation or depreciation of a home currency affects company cash inflows from foreign operations are conducted by branches abroad which are mere extensions of the home ...