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Please answer every part fully and correctly for a good review! Aa Aa E. 10. Multinational working capital management Multinational companies are exposed to complex
Please answer every part fully and correctly for a good review!
Aa Aa E. 10. Multinational working capital management Multinational companies are exposed to complex management and allocation of their resources. A multinational company's cash management, credit management, inventory management, and so on need to have several additional elements factored in compared with those of a purely domestic corporation. Consider this case: Multinational Inventory Management Streep Inc. is a U.S.-based multinational firm with a Decisions related to amount of investment in subsidiary in Switzerland. Last week, Streep created its inventory and inventory policy need to factor in periodic financial statements, and the subsidiary had the following: SFr 70,000 worth of inventory on its balance sheet. Streep translated the value of inventory using the spot Exchange rates exchange rate at that time of $0.815 SFr and recorded that value on its consolidated balance sheet. Possibility of import and export quotas or tariffs However, this week the exchange rate changed Tax Consequences dramatically to $0.9025 SFr. The subsidiary still has the Possibility of at-sea storage same amount of inventory (valued at SFr 70,000). If the firm were to create a new consolidated balance sheet and translate the value of its inventory at the new spot exchange rate, what would happen to the dollar value of inventory? O It would decrease by $6,104. O It would increase by $6,714. O It would decrease by $7,325. O It would increase by $6,104Step by Step Solution
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