Question

The following information is to be used in answering questions 16-17. In 1995, Ajax Manufacturings German subsidiary has the following balance sheet: Cash, marketable securities Accounts receivable Inventory (at market. Fixed Assets DM 250,000 1,000,000 2,700,000 5,100,000 Current liabilities Long-term debt Equity DM 750,000 3,400,000 v4,900,000 Total liabilities plus equity DM 9,050,000 DM 9,050,000 Total assets Suppose the DM appreciates from $0.70 to $0.76 during the period.

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Two questions, thank you.

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10.17 Under the temporal method.

Exposure under temporal = (cash + a/c receivable) - (a/c payable + current debt + long term debt)

10.19 Monetary/non=monetary method

Exposure under all current = Shareholder’s equity.

   

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