Gains or losses caused by translation adjustments

Assignment Help Financial Management

Reference no: EM132021969

1. In practice, when expanding into other countries, firms have been observed to follow a sequential search pattern as described in the behavioral theory of the firm.

True

False

2. Gains or losses caused by translation adjustments when using the current rate method are reported separately on the:

a. none of the other answers

b. consolidated balance sheet.

c. consolidated income statement.

d. consolidated statement of cash flow.

3. TropiKana Inc., a U.S firm, has just borrowed euro 1,000,000 to make improvements to an Italian fruit plantation and processing plant. If the interest rate is 5.50% per year and the Euro appreciates against the dollar from $1.40/€ at the time the loan was made to $1.45/€ at the end of the first year, how much interest will TropiKana pay at the end of the first year (rounded)?

a. $79,750

b. $37,931

c. $55,000

d. $77,000

4. Generally speaking, a firm wants to receive cash flows in a currency that is ________ relative to their own, and pay out in currencies that are ________ relative to their home currency.

a. appreciating; appreciating

b. appreciating; depreciating

c. depreciating; depreciating

d. depreciating; appreciating

5. A ________ is a direct reduction of taxes whereas a ________ reduces the taxable income before taxes.

a. none of the other answers

b. tax credit; tax deduction

c. foreign tax credit; domestic tax credit

d. tax deduction; tax credit

Reference no: EM132021969

Questions Cloud

How to source capital globally is usually aided early : The choice of when and how to source capital globally is usually aided early on by the advice of:

What is the monthly return on this investment vehicle : What is the effective annual rate? What is the monthly return on this investment vehicle?

What is your dollar return for the past year : One year ago you bought ABC stock for $69.00 per share. What is your dollar return for the past year? What is the capital gains yield?

Export receivables are normally sold at discount : Export receivables are normally sold at a discount. The size of the discount depends on the following factors EXCEPT.

Gains or losses caused by translation adjustments : Gains or losses caused by translation adjustments when using the current rate method are reported separately on the:

The dividend growth model to calculate the cost of equity : Assuming you use the dividend growth model to calculate the cost of equity, when determining a firm's weighted average cost of capital (WACC)?

How many days on average does it take firm to sell inventory : The firm has an average inventory of $480,000. How many days on average does it take the firm to sell its inventory?

The stakeholder capitalism model : The Stakeholder Capitalism Model (SCM):

Describe the impact any foreign currency adjustments : Summarize Walmart's accounting for their foreign currency translation adjustments. Identify and describe the impact any foreign currency adjustments.

User Account

All Pages