8. A parent company needs to determine the appropriate method for translating the financial statemen of a foreign subsidiary. To determine the appropriate translation method under both SFAS 52 and IAS 21, the functional currency of a foreign subsidiary must be identified. The functional currency is the primary currency of the foreign entity's operating environment. It can be either the parent's reporting currency or a foreign currency (generally the local currency). The functional currency orientation resul in the following rule. Please fill in the blanks re translation method and the translation adjustments. Functional Currency Translation Adjustment Translation Method Parent's currency Foreign currency 9. Define functional currency. 10. The following questions are in relation to Capital Budgeting Techniques: Fill in the blanks: What is the rate of average annual net income to the initial investment or average investment (book value) called? What is the discount rate that makes the initial investment equal the present value of subsequent net cash inflows? What is the number of years referred to in order to recover the initial investment? What is the difference between the initial investment and the present value of subsequent net cash inflows discounted at a given interest rate called? What is the valuation method used to estimate the attractiveness of an investment referred to as? 8. A parent company needs to determine the appropriate method for translating the financial statemen of a foreign subsidiary. To determine the appropriate translation method under both SFAS 52 and IAS 21, the functional currency of a foreign subsidiary must be identified. The functional currency is the primary currency of the foreign entity's operating environment. It can be either the parent's reporting currency or a foreign currency (generally the local currency). The functional currency orientation resul in the following rule. Please fill in the blanks re translation method and the translation adjustments. Functional Currency Translation Adjustment Translation Method Parent's currency Foreign currency 9. Define functional currency. 10. The following questions are in relation to Capital Budgeting Techniques: Fill in the blanks: What is the rate of average annual net income to the initial investment or average investment (book value) called? What is the discount rate that makes the initial investment equal the present value of subsequent net cash inflows? What is the number of years referred to in order to recover the initial investment? What is the difference between the initial investment and the present value of subsequent net cash inflows discounted at a given interest rate called? What is the valuation method used to estimate the attractiveness of an investment referred to as
