Essco Ltd,a Foreign Subsidiary of Peako Corp

question 22

Multiple Choice

Essco Ltd,a foreign subsidiary of Peako Corp.,has written down its inventory to current market value under a "lower of cost or market" rule. When consolidating Essco's balance sheet into Peako's balance sheet,what exchange rate should be used for the inventory under the temporal method?

• A)historical rate
• B)current rate
• C)average rate
• D)cannot be determined with the information given

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Definitions:

Marketing Synergies

The combined effect that is greater than the sum of their individual effects, achieved by coordinating marketing activities.

Product Differentiation

A marketing strategy where a company attempts to make its product appear unique and more attractive than those of its competitors.

Market Segment

A subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs.

North Carolina

A U.S. state located in the southeastern region, known for its diverse landscapes ranging from Atlantic Ocean beaches to the Appalachian Mountains.