HiTech, Inc. is a U.S. firm with a Mexican subsidiary. The subsidiary reports that its...
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Accounting
HiTech, Inc. is a U.S. firm with a Mexican subsidiary. The subsidiary reports that its balance sheet shows the following items:
Cash 5,000 pesos
Short term securities at market 3,000
Accounts receivable 1,000
Inventories at cost 3,000
Net plant 3,000
Current liabilities 5,000
Longterm debt 4,000.
The current rate is 30 Mexican Pesos=US$1.
Assume that the historical rate is 20 pesos per dollar. What is the translation exposure according to the current, current/noncurrent, monetary/nonmonetary, and temporal methods?
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