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NEW QUESTION: 1
Gary Smith, CFA, has been hired lo analyze a specialty tool and machinery manufacturer, Whitmore Corporation (WMC). WMC is a leading producer of specialty machinery in the United States. At the end of
2006, WMC purchased York Tool Company (YTC), an Australian firm in a similar line of business. YTC has partially integrated its marketing functions within WMC but still maintains control of its operations and secures its own financing. Following is a summary of the income statement and balance sheet for YTC (in millions of Australian dollars - AUD) for the past three years as well as exchange rate data over the same period.

Smith has discovered that WMC has a small subsidiary in Ukraine. The Subsidiary follows IAS accounting rules and uses FIFO inventory accounting. The Ukrainian subsidiary was acquired ten years ago and has been fully integrated into WMC's operations. WMC obtains funding for the subsidiary whenever the company finds profitable investments within Ukraine or surrounding countries. According to forecasts from economists, the Ukrainian currency is expected to depreciate relative to the U.S. dollar over the next few years. Local currency prices are forecasted to remain stable, however.
One of the managers at WMC asks Smith to analyze a third subsidiary located in India. The manager has explained that real interest rates in India over the last three years have been 2.00%, 2.50%, and 3.00%, respectively, while nominal interest rates have been 34.64%, 29.15%, and 25.66%, respectively. Smith requests more time to analyze the Indian subsidiary.
Which of the following statements regarding the consolidation of WMC's Ukrainian subsidiary for the next year is least likely correct? As compared to the temporal method, the Ukrainian subsidiary's translated:
A. net income before translation gains or losses would be higher using the all-current method.
B. gross profit margin would be lower using the all-current method.
C. debt to equity ratio would be higher using the all-current method.
Answer: B
Explanation:
Explanation/Reference:
Explanation:
Under both the all-current and temporal methods, the revenues for the Ukrainian subsidiary would be translated using the average rate. Cost of goods sold (COGS) would be translated using the historical rate for the temporal method and the average rate for the all-current method. Note that because local currency prices are expected to be constant in the Ukraine, there will be no difference between LIFO and FIFO since all beginning, purchased, sold, and ending inventory will have the same cost. When a currency is depreciating, the COGS based on historical cost (temporal method) will be higher than COGS translated at the average rate (all-current method) since the average rate will incorporate the historical exchange rate and the most recent (depreciated) exchange rate, decreasing the COGS. For instance, if COGS in the local currency is 10 and the historical and average exchange rates are 1 and 1.5 (local currency per reporting currency), then COGS under the temporal method will be 10 and under the all-current method will be 6.67. Since translated sales are the same under both methods, gross profit and the gross profit margin will be higher under the all-current method. (Study Session 6, LOS 23.e)

NEW QUESTION: 2
Outdoor macro BTS3900A supports RFU networking only, single cabinet can support 2 BBUs and support 6 RFUs.
A. False
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Answer: A

NEW QUESTION: 3
A production database virtual machine on Google Compute Engine has an ext4-formatted persistent disk for data files The database is about to run out of storage space How can you remediate the problem with the least amount of downtime?
A. In the Cloud Platform Console, increase the size of the persistent disk and use the resize2fs command in Linux.
B. In the Cloud Platform Console, create a new persistent disk attached to the virtual machine, format and mount it, and configure the database service to move the files to the new disk.
C. Shut down the virtual machine, use the Cloud Platform Console to increase the persistent disk size, then restart the virtual machine.
D. In the Cloud Platform Console, create a snapshot of the persistent disk, restore the snapshot to a new larger disk, unmount the old disk, mount the new disk, and restart the database service.
E. In the Cloud Platform Console, increase the size of the persistent disk and verify the new space is ready to use with the fdisk command in Linux.
Answer: A