A US Company Has a Subsidiary Located in Great Britain

question 25

Multiple Choice

A U.S. company has a subsidiary located in Great Britain. If the British pound is the functional currency and is appreciating relative to the dollar, what will happen to the following ratios after translation? $$\begin{array} { | l | c | c | } \hline & \text { Debt/Equity } & \begin{array} { c } \text { Net Profit } \\\text { Margin }\end{array} \\\hline \text { A) } & \text { Higher } & \text { Lower } \\\hline \text { B) } & \text { Higher } & \text { Same } \\\hline \text { C) } & \text { Same } & \text { Same } \\\hline \text { D) } & \text { Lower } & \text { Higher } \\\hline\end{array}$$

• A) Choice A
• B) Choice B
• C) Choice C
• D) Choice D

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Definitions:

Objectivity

The quality of being unbiased, fair, and impartial; an essential aspect of scientific research and clinical assessment.

Acceptance

The act of receiving something offered, favorably regarding something, or the acknowledgment of reality without an attempt to change it.

ACT

Acceptance and Commitment Therapy, a form of psychotherapy that encourages individuals to embrace their thoughts and feelings rather than fighting or feeling guilty for them.

Awareness

The state of being conscious of something, including understanding and sensitivity to certain issues.