Answer:
Cash outflow of $579,500
Explanation:
Net cash flow is the sum of all cash inflow and outflows of the company. In this question the company has cash outflow from Spain and inflow from Germany.
As per given data
Cash flow from Spain subsidiary = €5,000,000 outflow
Cash flow from German subsidiary = €4,500,000 inflow
Net cash flow to parent company = - €5,000,000 + €4,500,000
Net cash flow to parent company = - €500,000
The currency is converted using the exchange rate of two currencies which is $1.159 per euro.
Net cash Flow in U.S. dollars = - €500,000 x  $1.159 per euro
Net cash Flow in U.S. dollars = - $579,500
Answer:
The Spanish subsidiary generated a net outflow of Euro 5000000, which means that the outflow in dollar terms is : 5000000*1.159 = $5795000.
While the German subsidiary generated a net inflow of Euro 4500000, which means that the inflow in dollar terms is : 4500000*1.159 = 5215500.
Hence the total net inflow outflow for the year is,
Net Outflow = 5795000-5215500 = $579,500.
Hope this clear things up.
Thank You.
