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Ilya [14]
3 years ago
9

D. When incorporating, it is important to consider whether or not the company will conduct business internationally. 1. Summariz

e the impact of foreign exchange rates on the company’s financial statements. What risks do foreign exchange rates pose? Provide academically supported example(s) in your response
Business
1 answer:
steposvetlana [31]3 years ago
4 0

Answer with Explanation:

Foreign exchange rates can have significant impact on the company's financial statements because the spot rate at that date can be affect the value of the company's assets. It is very common in consolidated financial statement of a multinational companies.

The impact on the financial statements can be as under:

  • The fluctuation in currency value can under or over statement of assets, liabilities and Income & Expenses.
  • The fluctuation makes the analysis of the financial statements meaningless. The performance of the company in a consolidated statement will be in a state that would not be better understood or time consuming by experts to develop understanding of what the financial statement is saying. It would be difficult for an ordinary person to understand the performance of the business.
  • It can also also manipulate the value of the assets of the company because increase in devaluation of the currency means increase in inflation and vice versa.
  • The value of the company acquired can be affected significantly which means that the investment (value of whole company) can turn into significant losses which means it can result reporting losses of in a consolidated financial statement. This would also result in decrease in the stock value of the group as a whole.
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On May 3, 2017, Leven Corp. negotiated a short-term loan of $685,000. The loan is due October 1, 2017, and carries a 6.86% inter
Semmy [17]

Answer:

704076 $

Explanation:

Exact statement of the question is:

<em>May 3, 2007, Leven Corp. negotiated a short-term loan of $685,000. The loan is due October 1, 2007, and carries a 6.86% interest rate. Use ordinary interest to calculate the interest. What is the total amount Leven would pay on the maturity date? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)</em>

Solution:

Fro 3rd May to October 1st. 2017 there are 151 days

But 365 days = 1 year

==> 151 days = 151× 1/365 =0.414 years

But we use 1 year as one term

==> 1year = 1T

==>  T = 0.414

R= 6.86

P= 685000

A=?

We use formula for the term:

A= P(1+ \frac{R}{100} )^{T}

Where A= ammount at the end of term

P= Loan amount

R= Rate of interest

T= No. of terms

Putting values in this formula;

==> A= 685000×(1+\frac{6.86}{100}) ^{0.414}

==> A= 685000 × 1.02784938489=704076 $

6 0
3 years ago
Gomer decides to spend an hour playing basketball rather than studying. His opportunity cost is: Group of answer choices the inc
TEA [102]

Answer:

the benefit to his grades from studying for an hour

Explanation:

Opportunity cost also known as the alternative forgone, can be defined as the value, profit or benefits given up by an individual or organization in order to choose or acquire something deemed significant at the time.

Simply stated, it is the cost of not enjoying the benefits, profits or value associated with the alternative forgone or best alternative choice available.

In this scenario, Gomer decided to spend an hour playing basketball rather than studying his books. Thus, his opportunity cost is the benefit to his grades from studying for an hour.

This ultimately implies that, if he had spend the time he used in playing basketball to study, it would have added value to his grades.

6 0
3 years ago
Most countries, including the United States, import substantial amounts of goods and services from other countries. Yet the chap
Tju [1.3M]

Answer:

The main determinant is the NET IMPORT, if the net import is higher than the net export then countries like the United States of America will have a low standard of living,while if the net export is higher than the net import then Countries like the United States of America will enjoy a high standard of living.

COMPARED TO NET EXPORTS, COUNTRIES LIKE THE UNITED STATES OF AMERICA HAVE A LOWER NET IMPORT WHICH GIVES THEM A POSITIVE BALANCE OF TRADE.

Explanation: THE VOLUME OF IMPORT IS NOT THE MAIN CONCERN, THE MAIN CONCERN IS THE VOLUME OF NET IMPORT COMPARED TO THE VOLUME OF NET EXPORT COUNTRIES LIKE THE UNITED STATES OF AMERICA HAVE A HIGHER NET EXPORT THAN NET IMPORT WHICH GIVES THEM TRADE ADVANTAGE AND A POSITIVE BALANCE OF TRADE. With a good balance of trade a country like the United States of America will maintain and enjoy a high standard of living as the volume of imports is always lower than the value of what is exported.

3 0
3 years ago
The knowledge and skill that enable workers to be productive is called a) human capital b) talent capital c) human supply d) tal
Natalka [10]
Looks like the answer is A) human capital
5 0
3 years ago
What is any factor that makes it difficult for a new firm to enter a market referred to as?
Tpy6a [65]
A barrier to entry is any factor that makes it difficult for a new firm to enter a market. 
5 0
3 years ago
Read 2 more answers
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