A US-Based MNC Has a Subsidiary in China Where the Local

question 47

Essay

A U.S-based MNC has a subsidiary in China where the local currency is the Renminbi (RMB). The balance sheets and income statements of the subsidiary are presented in the table below. On December 31, 2005, the exchange rate was 8.27 RMB/US$. Assume the local currency figures in the statement below remain the same on December 31, 2006. Calculate the U.S. dollar translated figures for the two ending time periods assuming that between December 31, 2005 and December 31, 2006, the Chinese government revalues (appreciates) the RMB by 20 percent.
Translation of Income Statement Translation of Balance Sheet

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Definitions:

Hofstede's Framework

A model that identifies and analyzes five dimensions of cultural differences across countries, impacting workplace behaviors and values.

Values

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Human Values

Fundamental beliefs or standards that guide behavior and preferences in individuals and societies.

Achievement

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