The French Subsidiary of a Canadian Parent Has the Following

question 26

Essay

The French subsidiary of a Canadian parent has the following balance sheet (in euros):
$$\begin{array} { l r l r } \text { Cash } & \text { EUR 200,000 } & \begin{array} { l } \text { Current } \\\text { liabilities }\end{array} & \text { EUR400,000 } \\\text { Receivables } & 300,000 & \text { Long-term debt } & 100,000 \\\text { Inventory } & 400,000 & & \\\text { Net plant \& } & \underline { 500,000 } & \text { Owner's equity } & \underline { 900,000 } \\\text { equipment } & \text { EUR1,400,000 } && \text { EUR1,400,000 }\end{array}$$ The euro increases in value from EUR 1.6/C$ to EUR 1.3/C$.Using the current rate method,what happened to the total value of assets?

---

Definitions:

Brightness

A visual perception describing how luminous or vivid a light source or color appears to be.

Trichromatic Theory

A theory of color vision based on the existence of three types of cones in the retina that are most sensitive to blue, green, or red light.

Nobel Prize

A set of international awards given annually in several categories such as Physics, Chemistry, Medicine, Literature, and Peace, to individuals or organizations who have made significant contributions to humanity.

Wavelength

The distance between successive crests of a wave, especially points in a sound wave or electromagnetic wave, which is related to the wave's frequency and energy.