If a Company Is a Multinational Company with Operations in Several

question 91

Multiple Choice

If a company is a multinational company with operations in several different countries,one way to achieve comparability of historical-cost based ROIs for facilities in different countries is to

• A)restate the results of operations using the cash basis method of accounting.
• B)use GAAP for all reporting and calculations.
• C)restate the results of all operations in dollars.
• D)identify the rate of inflation in the most inflationary division and restate the other divisions' results using that rate.
• E)do nothing,the ROIs are comparable without adjustments.

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Definitions:

Compounded Monthly

The process of adding interest to the principal sum of a deposit or loan, with the effect that interest is then earned on the interest from the previous period.

Compounds Interest Continuously

A method of calculating interest where the interest earned is added to the principal so that the next interest calculation is on the sum of the principal plus previously earned interest.

Compounded Continuously

The process of calculating interest in which the earnings are reinvested and earn additional interest continuously over time.

Rule Of 72s

A shortcut to estimate the number of years required to double the invested money at a given annual rate of return.