Assume that a subsidiary operated in a foreign country, keeps its accounting records in a foreign currency that captures the underlying economics of the subsidiary, and operates independently of the parent company. Which if the following is true? Translation adjustments have an immediate effect on cash flows Translation adjustments should be reflected in earnings a. No No b. No Yes c. Yes No d. Yes Yes

Assume that a subsidiary operated in a foreign country, keeps its accounting records in a foreign currency that captures the underlying economics of the subsidiary, and operates independently of the parent company. Which if the following is true? Translation adjustments have an immediate effect on cash flows Translation adjustments should be reflected in earnings a. No No b. No Yes c. Yes No d. Yes Yes

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter12: Managing Economic Exposure And Translation Exposure

Section: Chapter Questions

Problem 4ST

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