Early in June 1983, it took 245 Japanese yen toequal $1. In August 2017, that exchange rate had fallen to 109 yen to $1. Assume that theprice of a Japanese-manufactured automobile was $9,000 in June 1983 and that its pricechanges were in direct relation to exchange rates.a. Has the price, in dollars, of the automobile increased or decreased during the 34-yearperiod because of changes in the exchange rate?b. What would the dollar price of the automobile be in August 2017, again assuming thatthe car’s price changes only with exchange rates?

Ganado Europe (A). Using facts in the chapter for Ganado Europe, assume the exchange rate on January 2, 2016, in Exhibit 11.5 dropped in value from $1.1400/€ to $0.8700/€. Recalculate Ganado Europe's translated balance sheet for January 2, 2016, with the new exchange rate using the current rate method as shown in the popup window,. What is the amount of translation gain or loss? a. What is the amount of translation gain or loss? Enter a positive number for a gain and negative for a loss. $ (Round to the nearest dollar.) Where should it appear in the financial statements? The translation gain (loss) for the year is added to the balance in the Cumulative Translation Adjustment (CTA) account.

3. Trading in foreign exchange What are spot rates and forward rates? Purple Whale Foodstuffs Inc., a U.S. company, produces and exports industrial machinery overseas. It recently made a sale to a Japanese manufacturing firm for ¥625 million, but the Japanese firm has 60 days before it must make the payment to Purple Whale Foodstuffs Inc. The spot exchange rate is ¥128.75 per dollar, and the 60-day forward rate is ¥133.45 per dollar. Is the yen selling at a premium or at a discount in the forward market relative to the U.S. dollar? The yen is trading at a discount in the forward market. In the forward market, the yen is trading at a premium. If the customer pays Purple Whale Foodstuffs Inc. the ¥625 million today, how much will Purple Whale Foodstuffs Inc. receive in dollars? O $4.85 million $5.34 million $5.09 million O $5.58 million Assuming that the forward market is correct and the spot exchange rate in 60 days will equal the 60-day forward exchange rate today, Purple Whale…

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Ganado Europe (C). Using facts in the chapter for Ganado Europe, assume the exchange rate on January 2, 2016, in Exhibit 11.5 appreciated from $1.2900/€ to $1.5800/€. Calculate Ganado Europe's translated balance sheet for January 2, 2016, with the new exchange rate using the current rate method as shown in the popup window, a. What is the amount of translation gain or loss? b. Where should it appear in the financial statements? Data table a. What is the amount of translation gain or loss? Enter a positive number for a gain and negative for a loss. (Round to the nearest dollar.) (Click on the following icon in order to copy its contents into a spreadsheet.) EXHIBIT 11.5 Ganado Europe's Translation Loss After Depreciation of the Euro: Current Rate Method Assets Cash In Euros (€) (US$/euro) December 31, 2015 Exchange Rate Translated Accounts (US$) January 2, 2016 Exchange Rate (US$/euro) Translated Accounts (US$) 1,500,000 1.2900 $1,935,000 1.5800 $2,370,000 Accounts receivable Inventory…

On January 1, 2021, Euro and USD exchange rate was 1.23 USD/EUR. Today, the Euro exchange rate is 0.83 EUR/USD. Can you tell if EUR has appreciated or depreciated relative to USD from January 1 to today? How much is the change in Euro currency value relative to USD? A.Euro has appreciated 32% relative to USD. B.Euro has depreciated 2% relative to USD. C.Euro has depreciated 32% relative to USD. D.Euro has appreciated 2% relative to USD.