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The following information refers to questions 6 to 9 inclusively. The determinaton of the classification of each foreign subsidiary requires professional judgement in evaluating the
The following information refers to questions 6 to 9 inclusively. The determinaton of the classification of each foreign subsidiary requires professional judgement in evaluating the exchange rate exposure to the parent company. For each of the following, classify whether the factor described would make the foreign operations an integrated subsidiary or a self-sustaining subsidiary: 13. Prices for the foreign subsidiary's products are set in the foreign country where the subsidiary is located. a. integrated (Cdn\$ is the functional currency). b. self sustaining (Cdn $ is not the functional currency). 14. A foreign subsidiary's supplies and inputs (labour, raw materials) mainly come from Canada. a. integrated (Cdn\$ is the functional currency). b. self sustaining (Cdn\$ is not the functional currency). 15. The foreign subsidiary obtains its bank financing in the parent company's country. a. integrated (Cdn\$ is the functional currency). b. self sustaining(Cdn\$ is not the functional currency). 16. The market for the foreign subsidiary's products is mainly in Canada. a. integrated (Cdn\$ is the functional currency). b. self sustaining(Cdn\$ is not the functional currency)
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