When incorporating, it is important to consider whether or not the companys business deals internationally. 1. Summarize the impact of foreign exchange rates on the companys financial statements. What risks do foreign exchange rates pose? 2. What are the two methods used to translate financial statements and how does the functional currency play a role in determining which method is used? 3. Compose a hypothetical example to demonstrate the translation process using the two methods. Ensure all information is entered accurately.