Discussion of Alternative Budget Comparisons. The text discussed three exchange rates that could be used for actual and budget amounts to evaluate performance of an international subsidiary. These were \(\mathbf{B}_{1}, \mathbf{B}_{2}\), and \(\mathbf{B}_{3}\) for budgets and \(\mathbf{A}_{1}, \mathbf{A}_{2}\), and \(\mathbf{A}_{3}\) for actual results.

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Assume that you have been asked by your boss, Nikki Stathopoulos who is the corporate controller of a U. S.-based firm with subsidiaries in 22 countries, to prepare a report on the usefulness and problems with each combination of a budgeted exchange rate and an actual exchange rate.

Nikki has asked you to evaluate each possible combination (i.e., \(\mathbf{B}_{1}\) and \(\mathbf{A}_{3}\) ). Give at least one positive and one negative for each combination.