1. A US company designs its products in US but manufactures those products in China. a) What type...

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Finance

1. A US company designs its products in US but manufacturesthose products in
China.
a) What type of currency exposure the US Company will face?
b) List three strategies to manage the operation exposure, andexplain how
they can be used to hedge the operation exposure.
2. A US company has a manufacturing subsidiary in Brazil and itcategorizes
Brazilian Real as the functional currency.
a) Explains the concept of functional currency;
b) Under US accounting, what currency translation method it willuse for this
subsidiary?
c) Explain the benefit of using this translation method.
3. Join a research team and the team decides on atopic. < don't bother

Answer & Explanation Solved by verified expert

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1 a The company would face foreign currency exposure of payables in Chinese currency for purchasing the manufactured products from its subsidary in China b The three strategies for managing the exposure is i The See Answer

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1. A US company designs its products in US but manufacturesthose products inChina.a) What type of currency exposure the US Company will face?b) List three strategies to manage the operation exposure, andexplain howthey can be used to hedge the operation exposure.2. A US company has a manufacturing subsidiary in Brazil and itcategorizesBrazilian Real as the functional currency.a) Explains the concept of functional currency;b) Under US accounting, what currency translation method it willuse for thissubsidiary?c) Explain the benefit of using this translation method.3. Join a research team and the team decides on atopic. < don't bother