Question
Betancourt International has operations in Arrakis. The balance sheet for this division in Arrakeen solaris shows assets of 34,000 solaris, debt in the amount of
| Betancourt International has operations in Arrakis. The balance sheet for this division in Arrakeen solaris shows assets of 34,000 solaris, debt in the amount of 13,000 solaris, and equity of 21,000 solaris. |
| Required: |
| (a) | If the current exchange ratio is 1.44 solaris per dollar, what does the balance sheet look like in dollars? |
| Balance Sheet | |||
| Assets | Liabilities | ||
| Debt | $ | ||
| Equity | |||
| Assets | $ | Total liabilities & equity | $ |
| (b) | Assume that one year from now the balance sheet in solaris is exactly the same as at the beginning of the year. If the exchange rate is 1.59 solaris per dollar, what does the balance sheet look like in dollars now? |
| Balance Sheet | |||
| Assets | Liabilities | ||
| Debt | $ | ||
| Equity | |||
| Assets | $ | Total liabilities & equity | $ |
| (c) | Assume that one year from now the balance sheet in solaris is exactly the same as at the beginning of the year. If the exchange rate is 1.29 solaris per dollar, what does the balance sheet look like in dollars now? |
| Balance Sheet | |||
| Assets | Liabilities | ||
| Debt | $ | ||
| Equity | |||
| Assets | $ | Total liabilities & equity | $ |
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