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FIN-504 MODULE 8 HW

# FIN-504 MODULE 8 HW - FIN 504 Finance Principals Gerald...

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FIN 504 - Finance Principals Gerald McGill Grand Canyon University Module Eight - International Managerial Finance 18-2 Translation of Income Statement 12/31/2009 12/31/2010 Euro€ US\$ US\$ Sales \$30,000.00 \$36,000.00 \$38,100.00 Cost of Goods \$29,750.00 \$35,700.00 \$37,782.50 Operating Profits \$250.00 \$300.00 \$317.50 Translation of Balance Sheet 12/31/2009 12/31/2010 Assets Euro€ US\$ US\$ Cash \$40.00 \$48.00 \$50.80 Inventory \$300.00 \$360.00 \$381.00 Plant & Equipment (net) \$160.00 \$192.00 \$203.20 Total \$500.00 \$600.00 \$635.00 Liabilities and Stockholders Equity 12/31/2009 12/31/2010 Euro€ US\$ US\$ Debt \$240.00 \$288.00 \$304.80 Paid-In Capital \$200.00 \$240.00 \$254.00 Retained Earnings \$60.00 \$72.00 \$76.20 Total \$500.00 \$600.00 \$635.00 \$1.20/€1 as of 12/31/2009 \$1.20 X 1.06 = \$1.27/€1 as of 12/31/2010 On 12/31/2009, the exchange rate is \$1.20/€1 Calculate the U.S. Dollar-translated figures for the two ending time periods, assuming that between 12/31/2009 and 12/31/2010 the euro has appreciated against the U.S. Dollar by 6%. 18-5

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A U.S.-based multinational company has two subsidiaries, one in Mexico (local currency, Mexican peso, MP) and one in Japan (local currency, yen, ¥). Forecasts of business operations indicate the following short-term financing position for each subsidiary (in equivalent U.S. dollars):
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FIN-504 MODULE 8 HW - FIN 504 Finance Principals Gerald...

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