There Have Been Few Good Studies on the Use of Local

question 9

Multiple Choice

There have been few good studies on the use of local currency versus parent currency in establishing budgets. However, the Appleyard study of a small sample of British firms found that

• A) most firms set their budgets in local currency.
• B) most firms set their budgets in sterling.
• C) most firms set their budgets in both sterling and the local currency.
• D) most firms set their budgets in the local currency, although all of them saw the final results in sterling.

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Definitions:

Residual Value

The estimated amount that an asset will be worth at the end of its useful life.

Gross Margins

A company's revenue minus its cost of goods sold, expressed as a percentage, indicating the percentage of sales revenue that turns into profit.

Opening Inventory

The value of a company's inventory at the beginning of its accounting period, which includes raw materials, work-in-progress, and finished goods ready for sale.

Net Book Value

The value of an asset as recorded on the balance sheet, subtracting accumulated depreciation or amortization from its original cost.