Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem: Zapata Auto Parts, the Mexican affiliate of American Diversified, company had the following balance sheet on January 1

Assets (Mex$ millions)

Liabilities (Mex$ millions)

Cash, marketable securities

Mex$1,000

 

 

Accounts receivable

50,000

Current liabilities

Mex$47,000

Inventory

32,000

Long-term debt

12,000

Fixed assets

111,000

Equity

135,000

 

Mex$194,000

 

Mex$194,000

The exchange rate on January 1 was Mex$8,000 = $1.

[A] Determine Zapata's FASB 52 peso translation exposure on January 1?

[B] Assume the exchange rate on December 31 is Mex$12,000. What will be Zapata's translation loss for the year?

[C] Zapata can borrow an additional Mex$15,000 [in millions]. Estimate this due to its translation exposure if it uses the funds to pay a dividend to its parent? If it uses the funds to rise its cash position?

 

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M921499

Have any Question? 


Related Questions in Basic Finance

What is the objective of an industry self-regulatory

What is the objective of an industry self-regulatory organization? Compare and contrast three types of futures trading costs? Compare and contrast cash settlement with physical settlement ? Identify the typical character ...

Imagine that you have collected the following set of iq

Imagine that you have collected the following set of IQ scores: a . Construct a simple frequency distribution of these scores. b. Construct a grouped frequency distribution of these scores that includes both frequencies ...

Due to recent bad press a major healthcare company has

Due to recent bad press, a major healthcare company has experienced a market reevaluation. The firm has a $1,000 bond issue outstanding with 15 years to maturity and a coupon rate of 8%, with interest paid semiannually. ...

1 which type of error do researchers usually regard as more

1. Which type of error do researchers usually regard as more serious? Why? 2. Explain what it means if a researcher sets the alpha level for a statistical test at .05. 3. What does it mean if the difference between two m ...

An article observes the federal reserve announced that it

An article observes: "The Federal Reserve announced that it would open currency swap lines-in essence, printing dollars and exchanging them for euros. . . ." Why would the Fed and the European Central Bank enter into suc ...

Consider a projects incremental cash flows in order -700

Consider a project's incremental cash flows in order: -$700, $400, $300, $400. Assume a cost of capital of 7%. How does the NPV that you get by using Excel's NPV function all by itself compare to the correct NPV for this ...

Picture yourself working in the field of international

Picture yourself working in the field of international banking and finance and discuss both what excites you the most and what would present the greatest challenges to you personally.

What is the relation between a companys operating risk and

What is the relation between a company's operating risk and its optimal capital structure? What is meant by the pecking order theory of capital structure? What are the implications of the Modigliani-Miller theory of capi ...

Identify general-purpose statements and communication

Identify general-purpose statements and communication objectives for several situations. Read the following situations and write a general-purpose statement and a specific communication objective-the results you want-for ...

There is an ongoing debate on the amount of regulation of

There is an ongoing debate on the amount of regulation of derivatives. What are your opinions on derivatives regulation? Should this market have increased regulation? Why or why not?

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen