Sioux City Meat Packers (SCMP) is an American company with a wholly-owned German subsidiary. Suppose the EUR depreciates against the USD. Which of the following describes the subsequent conversion effect?
none of the options
Cash flows in EUR could be altered due a change in the firm's competitive position in the marketplace.
Operating cash flows in EUR be reflected in higher USD cash flows.
Cash flows in EUR could be affected due a change in the SCMP's competitive position in the market place, and a given operating cash flow in EUR will be reflected in a higher USD cash flow.