Department of Finance Professor: HJ. Abraham Lin Koppelman School of Business Brooklyn College FINC3377 Global Financial Management Translation Using the Current Rate Method: euro depreciates from $1.1800/euro to $0.9000/euro. Just before devaluation Just after devaluation Translated Translated Exchange Rate Accounts Statement (USS/euro) US dollars Exchange Rate Accounts US dollars 0.9 1440000 Cash Accounts receivable inventory Net plant & equipment 1600000 3776000 2832000 2160000 1.18 1.18 Total iabilities & Net Worth Accounts payable Short-term bank debt Long-term debt Common stock Retained eanings CTA account (loss) 800000 944000 1800000 1.276 1.276 1.18 7316000 7316000 Total 5. The balance of the balance sheet "C is a. $12,000,000 b. $153,000,000 c. $160,000,450 d. $14,160,000 e. $10,800,000 a.$6,200,000 b. $2,412,800 6. The CTA account loss D is negative d. $7,316,000 e. $172,800 c. $11800 Using facts in the chapter for Trident Europe, assume as in question Trident Europe (A) that the exchange rate on January 2, 2006, in Exhibit 11.4 dropped in value from $1.2000/ to $0.8800/E rather than to $1.0000/. Recalculate Trident Europe's translated balance sheet for January 2, 2006 with the new exchange rate using the temporal rate method Just before devaluation Just after devaluation Translated Translated Exchange Rate Accounts Exchange Rate Accounts Statement (USVeuro) (US dollars) Assets Cash Accounts receivable Inventory Net plant & equipment US dollars) 1920000 1218 1.276 2923200 6124800 1.218 1.276 6124800 Total Liabilities & Net Worth Accounts payable Short-term bank debt Long-term debt Common stock Retained earnings CTA account (loss) 960000 1920000 1920000 800000 1600000 1.276 1 243742 2296800 7711200 1276 7711200 1243742 Total 7. The balance of the balance sheet "E" is a. $12,000,000 b. $153,000,000 c. $13,272,000 d. $14,160,000 e. $10,800,000810. 8. The CTA account loss F is negative a.$6,200,000 b. $2,412,800 c. $256000 d. $7,316,000 e. $172,800