Payment for plant construction

Q:  Do we pay for construction of the new plant in Sereno in pesos or dollars?  With the exchange rate jumping so much, we would be able to build the plant in Sereno with much less dollars this quarter than last because of the jump in exchange rates.  We are assuming that the exchange rates will help us.

A:  Payment is made in pesos for a new plant in Sereno.  If your Sereno subsidiary needs additional funds to make the payment, your parent company will purchase enough stock in the subsidiary to make up the shortage.  The dollars will be converted to pesos at the exchange rate in effect at the time of the funds transfer.