1. How did the DM130,719 transaction loss arise? Show how this loss was calculated (see Exhibit 3). 2. Complete Exhibits 1, 2, and 3. 3. Why does Deutz's have a remeasurement gain (or loss) and a translation gain (or loss) in 2001? (explain with words rather than numbers). 4. What differences do the choice of functional currency make in the German subsidiary's dollar statement results and its key financial ratios? Explain the reasons for these differences. 5. It is Machinery International's practice to evaluate its overseas operations' performance in terms of their U.S. dollar equivalent performance. The key performance measurements used by Machinery International are U.S. denominated return on sales, return on equity, return on assets and net income. If Machinery International changes Deutz's functional currency for financial reporting purposes, it intends to use the same approach for measuring the performance of the Deutz management. As a Deutz senior manager, how might you react to the new performance meas