H. C. Andersen Enterprises

The parent and Danish affiliate balance sheets of H.C. Andersen Enterprises are as follows (in thousands of monetary units):

H. C. Andersen Enterprises Danish

(parent only) affiliate

*Includes DKr1,800,000 owed to H.C. Andersen parent by Danish affiliate.______________________________________________________________________________________________________________________________________________

	HC ANDERSON	Danish
assets
cash	600	DKR 3600
Acc Rec	1200	1800
Inventory	1200	3240
Net Plant & Equip	1800	3600
investment in affeliate	684
	5684	dkr 12,240
Liabilities & net worth
Accounts Payable	300	dkr 5400
Shareholder's Equity	5184	6840
	5484	DKR 12,240

The current (and historic) exchange rate is DKr10.00/$. H.C. Andersen Enterprises translates by the current rate method and uses the U.S. dollar as its reporting currency.

a. Is there any translation exposure within H.C. Andersen Enterprises worldwide? If so, how much and where?

b. Is there any transaction exposure within H.C. Andersen Enterprises worldwide? If so, how much and where?

c. What should be the effect on H.C. Andersen Enterprises if the Danish krone strengthened to KDr8.00/$? Show monetary amounts, and assume the intracompany payables/receivables are not paid off until after revaluation.