WHAT IS A CONCESSIONARY LOAN? Select one O a A LOAN FROM THE PARENT COMPANY TO ITS RIVAL COMPANIES SUBSIDIARY OBALOAN FROM A SUBSIDIARY TO ITS PARENT COMPANY O CALOW INTEREST LOAN TO A COMPANY FOR A CAPITAL EXPENDITURE MADE IN THE FOREIGN LAND O NONE OF THESE CHOICES

WHAT IS A CONCESSIONARY LOAN? Select one O a A LOAN FROM THE PARENT COMPANY TO ITS RIVAL COMPANIES SUBSIDIARY OBALOAN FROM A SUBSIDIARY TO ITS PARENT COMPANY O CALOW INTEREST LOAN TO A COMPANY FOR A CAPITAL EXPENDITURE MADE IN THE FOREIGN LAND O NONE OF THESE CHOICES

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Related questions

Q: Choose the correct.The ownership and control of foreign assets such as a manufacturing plant is…

A: Option B is the correct answer

Q: Darwin Ltd, an Australian company, acquires a beneficial interest and becomes the Holding company of…

A: Consolidation of foreign subsidiary: The financial statements of foreign subsidiaries is translated…

Q: They apply to

A: Examples of like-kind properties: The like-kind properties should include assets that fall under the…

Q: Statement 1: The components of other comprehensive income include changes in revaluation surplus.…

A: Lets understand basic thing about the other comprehensive income. Other comprehensive income is a…

Q: , IFRS Financial Instruments One of the following is not within the scope of the standard

A: The scope of the standard applies to all financial instrument except: 1. Interest associated with an…

Q: A multinational corporation has a subsidiary in a country that restricts the funds that can be…

A: The financing is a process of raising the funds for the project or organization to run the business…

Q: How are gains and losses on financial instruments used to hedge the net investment in a foreign…

A: Financial instruments are either tradable assets or can alternatively be thought of as bundles of…

Q: What are the differences in accounting for a forward contract used as a fair value hedge of (a) a…

A: Forward contract: Forward contract is the contract entered by two private parties to buy or sell a…

Q: Identify the two recognized lease-accounting methods for lessees and distinguish between them. What…

A: The two recognized lease-accounting methods for lessees are the operating lease method and the…

Q: Clarke Company operates a subsidiary in another nation. What does the phrase functional currency…

A: Functional currency, which is popular among multinational corporations, reflects the major economic…

Q: Which of the following is NOT true about capitalizing interest under U.S. GAAP? (A 24) Group of…

A: Introduction: The Financial Accounting Standards Board issues a set of accounting rules, standards,…

Q: Q1. Explain the differences between translation and remeasurement of financial statements of a…

A: Translation and remeasurement are relevant in case the parent company has subsidiaries in foreign…

Q: Gains from remeasuring a foreign subsidiary's financial statements from the local currency, which is…

A: If the functional currency is not the local currency, then it is measured in the U.S. dollar under…

Q: Which of the following is matter if a U.S. parent firm plans to completely finance the establishment…

A: Retained earnings- are the cumulative profit of a firm that is retained after accounting for…

Q: A company has invested in a financial instrument and is trying to determine whether or not it is a…

A: When determining whether a financial instrument is a derivative, the materiality of the amount…

Q: What is the five firm concentration ratio?

A: Concentration ratio- It is defined as the collective market share of the largest firm in an…

Q: A. Capital flows B. Direct foreign investment C. Indirect foreign investment occurs when a company…

A: International business and investment involve various forms of capital flows between countries,…

Q: If you are the manager, you should understand which of the operations do not create benefit from…

A: Depreciation of currency is termed as the reduction of value of currency in terms of other currency.

Q: How does a company determine the fair value of a foreign currency forward contract? How does it…

A: The fair value of a foreign currency forward contract is determined by reference to changes in the…

Q: payment methods used in foreign trade

A: Option A is wrong because letter of credit is used as a payment method in foreign trade. Letter of…

Q: Clarke Company has a subsidiary operating in a foreign country. In relation to this subsidiary, what…

A: In relation to the subsidiary company, functional currency is the currency in which the entity…

Q: A sale and leaseback arrangement does which one of the following? Select one: O a. allows the lessor…

A: Sale and leaseback transactions: under this transaction the lessor sold the goods to the lessee and…

Q: How many ways are there through which Islamic banks transfer ownership of the leased asset to the…

A: An arrangement in which the asset is provided by one party to the user of the asset is termed as a…

Q: Why is it so difficult to estimate the value of retained profits when translating the financial…

A: Introduction: Retained earnings: Retained earnings are the portion of a company's profits earned but…

Q: Exchange differences arising on a monetary item that forms part of a reporting entity's net…

A: As per IFRS 21 OR PFRS 21 Accounting for foreign currency transactions, Monetary items are units of…

Q: Should a country’s government assist private businesses in the conduct of international trade…

A: Yes , a country’s government can assist private businesses in the conduct of international trade by…

Q: How does a parent firm identify the most acceptable approach for translating a foreign subsidiary's…

A: In the context of the subsidiary firm, functional currency refers to the money in which the entity…

Q: In translating the financial statements of a foreign subsidiary, why is the value assigned to…

A: Balance of retained earnings is created by multitude transactions like gains, losses, expenses,…

Q: which of the following is correct regarding the sale or exchange of virtual currency: A. no gain or…

A: A financial asset is also subject to the taxation even nowadays trending of the asset which is…

Q: What causes balance sheet (or translation) exposure to foreign exchange risk? How does balance sheet…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: Example (E9-20 modified) Tony LoBianco Company exchanged equipment used in its manufacturing…

A: Asset exchange: It is an arrangement in which two parties exchange their assets. This exchange can…

Q: Profit on exchange differences, arising on transaction of foreign operations are classified as: a.…

A: Introduction: Foreign exchange: Buying and selling of foreign currencies , entering in to the…

Q: A subsidiary’s functional currency is the U.S. dollar. The exchange rate used to convert…

A: The results of a parent company's international subsidiaries are translated into the reporting…

Q: Other comprehensive income includes all of the following, except: unrealized gains on available for…

A: Other comprehensive income includes income that does not need to consider under net income currently…

Q: In translating a foreign subsidiary's financial statements, which exchange rates does the current…

A: Introduction:- As per U.S. GAAP the current rate method is required for translating (assets and…

Q: Explain the ‘qualifying asset’ and how do we treat exchange rate differences relating to the…

A: A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for…

Q: What are the relevant cash flows for an international investment—the cash flowsproduced by the…

A: International investments are investments that are made by a company in a country other than its…

Question

WHAT IS A CONCESSIONARY LOAN?
Select one
O a A LOAN FROM THE PARENT COMPANY TO ITS RIVAL COMPANIES SUBSIDIARY
ObALOAN FROM A SUBSIDIARY TO ITS PARENT COMPANY
O CALOW INTEREST LOAN TO A COMPANY FOR A CAPITAL EXPENDITURE MADE IN THE FOREIGN LAND
Od NONE OF THESE CHOICES

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Requirements of the question and the answers we have to determine

VIEW

Step 2: Let us look at the correct answer with explanation

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

A firm decides to sell a pool of receivables to a factor with recourse (i.e. the firm selling the receivables must make payment to the buyer of the receivables in the event that the party that originally owes the money does not pay). Under Current U.S. GAAP, which of the following statements is (are) true: A. The firm selling the receivables is prohibited from reporting any Gain or Loss on the sale. B. Any cash received from such a transaction must be reported in the Financing Section of the Statement of Cash Flows. C. Both Statements A & B are true. D. None of the above statements are true.
Which cash flows are important for an overseas investment: those generated by the subsidiary in the country in which it operates or those sent to the parent firm in dollars?
nee 1. If the foreign subsidiary of a US Corporation uses the currency of the region as its functional currency, which of the following methods would they use and where would gains and losses be reported? A. Remeasurement, Temporal method. Income statement. B. Translation, Current Rate method. Comprehensive income. C. Remeasurement, Temporal method. Comprehensive income. D. Translation, Current Rate method. Income statement 2. If the foreign subsidiary of a US Corp uses US currency as its functional currency, which of the following methods would they use? Where would gains and losses be presented? A. Translation, Current Rate method. Comprehensive Income B. Translation, Current Rate method. Income statement C. Remeasurement, Temporal method. Comprehensive income. D. Remeasurement, Temporal Method. Income Statement
Lease analysis "symmetry" implies that: A Both parties experience identical cash flows. B The economic viability depends solely on the lease terms. Differences in tax rates can make leasing beneficial to both sides. 6.0 (D) The NPV and IRR of both parties have opposite signs. Jury
Company A exchanges equipment with Company B, resulting in a gain for company A. The transaction has commercial substance. Which of the following statements is TRUE regarding this transaction as it related to company A? The entire amount of the gain would be recognized Only a part of the gain would be recognized None of the gain would be recongnized Because the transaction has commercial substance. Company A is in the same economic position as it was before the exchange took place.
Why might a company prefer a foreign currency option rather than a forward contract in hedging a foreign currency firm commitment? Why might a company prefer a forward contract over an option in hedging a foreign currency asset or liability?
What are the circumstances under which the capital expenditure of a foreign subsidiary might have a positive NPV in local currency terms but be unprofitable from the parent firm’s perspective?
Forex: Translation and RemeasurementThe following assets are held by a subsidiary in a foreign country: 1. At what amount should be reported as total assets if the financial statement is to be translated as of Jan. 31?2. At what amount should be reported as total assets if the financial statement is to be remeasured as of Jan. 31?
Consider a US-based MNC with a wholly owned Italian subsidiary. Following a depreciation of the dollar against the euro, which of the following conclusions are correct? Group of answer choices a. The cash flow in euros could be altered due a change in the firm's competitive position in the marketplace. b. A given operating cash flow in euros will be converted to a higher US dollar cash flow. c. Both A and B d. None of the above
A U.S. parent firm has a subsidiary using euro. The manager of the parent firm should understand that ___________ is economically beneficial to the parent firm. A. weakening euro B. stable euro currency C. stable US dollar D. strengthening euro
All of the following are common loan restrictions except? * restrictions on dividends or other payments to owners and/or investors limits on total equity limits on total debt restrictions on additional capital expenditures

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS