Which of the Following Operations Benefits from Appreciation of the Firm's

question 25

Multiple Choice

Which of the following operations benefits from appreciation of the firm's local currency?

• A) borrowing in a foreign currency and converting the funds to the local currency prior to the appreciation.
• B) receiving earnings dividends from foreign subsidiaries.
• C) purchasing supplies locally rather than overseas.
• D) exporting to foreign countries.

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Definitions:

Parent's Share

The proportion of equity held in a subsidiary by the parent company, often representing controlling interest.

Goodwill

An intangible asset that arises when a company acquires another company for a price higher than the fair value of its net identifiable assets.

Consolidation Approach

A method in accounting where the financial statements of a parent company and its subsidiaries are presented as one.

Parent-Company Method

A method of accounting wherein investments in subsidiaries are shown at cost or at fair value within the parent company's financial statements.