Chicago based Corporation X has a number of exporting transactions with companies based in Sweden. Exporting activities result in receivables. If the settlement currency is the Swedish Krona, which of the following will happen by changes in the direct or indirect exchange rates? Direct Exchange Rate Indirect
Chicago based Corporation X has a number of exporting transactions with companies based in Sweden. Exporting activities result in receivables. If the settlement currency is the Swedish Krona, which of the following will happen by changes in the direct or indirect exchange rates? Direct Exchange Rate Indirect
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Question 37
Chicago based Corporation X has a number of exporting transactions with companies based in Sweden. Exporting activities result in receivables. If the settlement currency is the Swedish Krona, which of the following will happen by changes in the direct or indirect exchange rates?
|
Direct Exchange Rate |
Indirect Exchange Rate |
||
|
Increases |
Decreases |
Increases |
Decreases |
A. |
Loss |
Gain |
NA |
NA |
B. |
Loss |
Gain |
Gain |
Loss |
C. |
NA |
NA |
NA |
NA |
D. |
Gain |
Loss |
Loss |
Gain |
Option A |
||
Option B |
||
Option C |
||
Option D |
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