Restating for foreign inflation

Assignment Help Finance Basics
Reference no: EM1345989

Aztec Corporation, a U.S. subsidiary in Mexico City begins and ends its calendar year with an inventory balance of P500 million. The dollar/peso exchange rate on January 1 was $.02=P1. During the year, the U.S. general price level advances from 180 to 198 while Mexican general price level doubles. The exchange rate on December 31 was $0.015=P1.

a. Using the temporal method of translation, calculate the dollar equivalent of the inventory balance by first restating for foreign inflation, then translating to U.S. dollars.

b. Repeat part (a), but translate the nominal peso balances to dollars before restating for U.S. inflation.

c. Which dollar figure do you think provides the more useful information?

d. If you are dissatisfied with either result, suggest a method that would prove more useful information that those is parts (a) and (b).

Reference no: EM1345989

Previous Q& A

  Computing successive values of congestion window

Determine successive values of congestion window in bytes?

  What is the mirrors focal length

The two springs each have a spring constant of 11. They are stretched by 1 as a current passes through the wire. How big is the current.

  Operating risk and financial risk impact the required return

How would not having to pay taxes impact our future cash flows? Would the depreciation tax shield offset the actual tax cost?

  Find the volume of the interior of the house

A 9.0 Kg box of oranges slides from rest down a frictionless incline from a height of 5.0 m. A constant frictional force, introduced at point A, brings the block to rest at point B, 19 m to right of point A. What is the velocity of the box just be..

  Hedging continual economic exposure

Consider a real-world dilemma face by many firms that rely on exporting. Clark Financing, Inc. produces its products in its factory in Texas and exports most of the products to Mexico each month.

  Calculate monthly payment for the loan

You get small business loan in the amount of 50,000 is the value you require to buy the restaurant location. After researching banks to find the best interest rate.

  What rate is the electric field between plates changing

A 50 kg block and a 100kg block are connected by string. the pulley is frictionless and of negligible mass. the coefficient of kinetic friction between the 50kg block and incline is 0.250. find the change in the kinetic energy of the 50kg block as..

  Illustrate what is the money multiplier

Illustrate what is the money multiplier. Illustrate what is the available lending capacity.

  Kind of networking hardware used-dsl for internet connection

Most homeowners select to install a DSL for Internet connection what kind of networking hardware would you suggest?

  What will be the mirros focal length

An object 9 cm tall is placed at the zero mark of a meterstick. A spherical mirror located at some point on the meterstick creates an image of the object that is upright, 4 cm tall, and located at the 49.0 cm mark of the meterstick.

Reviews

Write a Review

 

Similar Q& A

  Description of equity and debt

For Verizon Communications identify two projects or events that required an investment. One should be a 'current project' and the other long-term investment project.

  Computation of present value of cash flows

Computation of present value of cash flows and What is the present value of this cash stream

  Description of dividend policy

Discuss the advantages, disadvantages, and types of firms (e.g. growth oriented, mature, etc.) that might be likely to adopt each type of the following dividend policies:

  Interest versus dividend income

Compute the firms tax on its operating earnings only. Find out the tax and the after-tax amount attributable to the interest income from Zig Manufacturing bonds.

  Describe decision for submission on bid price

Describe Decision for submission on Bid Price and install the equipment necessary to start production of the screws

  Diversification of portfolios

Enron employees were heavily invested in Enron stock through their 401(k) plans. While firms frequently provide a match in the form of firm stock, employees are typically free to move the money to an optional investment.

  Computation of ytm if the bonds are purchased at issue price

Computation of YTM if the bonds are purchased at Issue price & Market price and analyzing the difference

  Pay some university expenses

Portfolio's beta is 1.5. Thomas is allowing for selling particular stock to aid pay some university expenses.

  Computing yield to maturity if semi-annual payments is given

Present price is quoted at 98.59% of par value. Suppose semi-annual payments. Determine the yield to maturity?

  Computation of interest payable on bonds and journal entry

Computation of interest payable on Bonds and Journal entry to record issuance of the bond

  Find the correct statement regarding profit sharing plan

Determine the correct statement regarding profit sharing plan.

  Application: developing a budget

Application: Developing a Budget, Review the information in this week's Learning Resources (including the Media) dealing with both volume budgets and staffing and supply budgets, what is included in each, and how they vary from each other.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd