Trans-mediterranean aluminum using the current rate method

Assignment Help Financial Management

Reference no: EM131448600

Bangkok Ingot, LTd is the Thai Subsidiary of Trans-Mediterranean Aluminum, a U.S. Multinational that fashions automobile engine block from aluminum. Bangkok Ingot's Dec 31 balance sheet measured in Thai Baht (THB) is shown below. At the date of this balance sheet the exchange rate between Thai Baht and U .S. dollar was 0.028/THB.

Assets: Liabilities and Equity

Cash 5,000 Long-Term Debt 40,000

Accounts Rec 25,000 Equity 45,000

Inventory 35,000 Accounts Payable 25,000

Net Plant & Equip 45,000

Total Assets: 110,000 Total L&E 110,000

Assume that Bangkok Ingot's balance sheet does not change during the next year, but the exchange rate changes to 0.022/THB Calculate the translation exposure (gain/loss) to Trans-Mediterranean Aluminum using the current rate method. Treat 0.028/THB as also the historical exchange rate in this case. PLEASE SHOW ALL WORK.

Reference no: EM131448600

Questions Cloud

Make sense to develop an efficient frontier : Does it still make sense to develop an efficient frontier while adhering to this approach to investment?

What is this stock worth to you per share : What is this stock worth to you per share if you demand a 7% rate of return?

Market rate of return if this stock is currently selling : What is the market rate of return if this stock is currently selling for $22 a share?

Severe downward slope with short-term yields : In the early 1980s, the Treasury yield curve had severe downward slope with short-term yields near 20% and long-term yields below 15%. Explain how such pattern

Trans-mediterranean aluminum using the current rate method : Calculate the translation exposure (gain/loss) to Trans-Mediterranean Aluminum using the current rate method.

What is market value of the stock after the rights offering : If you exercise your preemptive rights, how many of the new shares can you purchase? What is the market value of the stock after the rights offering?

What is the market price of face value bond : What is the market price of a $1,000 face value bond?

What was the closing stock price of abbott laboratories : What was the closing stock price of Abbott Laboratories on July 25, 2013? What were the high and low prices at which McGrarw Hill traded between July 26, 2013

What is npv of this project if discount rate is infinite : What is the NPV of this project if the discount rate is infinite?

User Account

All Pages