There Are Two Points at Which Operating in Foreign Currencies

question 76

Multiple Choice

There are two points at which operating in foreign currencies raises accounting issues-

• A) transactions in foreign currencies and corporate consolidation.
• B) buying and selling in the host-country currency.
• C) bank loans and issuing foreign shares such as American depository receipts (ADRs).
• D) consolidation and bank loans.

Understand and apply the concept of equivalent annual cost in comparing projects with different lifespans.

Analyze the after-tax salvage value of assets and its impact on project valuation.

Apply the tax shield approach to define operating cash flow for a project.

Understand and apply different methods for computing net cash flow from the sale of an asset.

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Definitions:

Division I Proposal

An alternative to bankruptcy, created by the Bankruptcy and Insolvency Act, whereby the debtor secures some time to reorganize his affairs and make a proposal for partial payment that will satisfy his creditors; if the creditors reject the proposal, the insolvent debtor is deemed to have made an assignment in bankruptcy from the day of the meeting of the creditors, and the normal bankruptcy procedures follow.

Consumer Debtors

Individuals or entities that owe money for personal, as opposed to business, expenses.

Chose In Action

The thing or benefit that is transferred in an assignment; intangible personal property, such as a claim or the right to sue.

Personal Property Security Act

Legislation that outlines the rules for creating and enforcing security interests in personal property, offering a way for creditors to secure repayment of debt.