A major difference between capital budgeting for domestic operations and foreign operations is that:
A. cash flow estimation is easier (less complex) for foreign operations.
B. repatriation of earnings does not occur in foreign operations of multinational firms that are headquartered in the United States.
C. estimating cash flows generated from foreign operations is more complex due to fluctuating exchange rates.
D. foreign operations are not taxed by both the home country and the host country.
E. foreign operations rarely are not as risky as domestic operations.
Answer: C
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Work Room Company purchased equipment for $45,000. Total depreciation of $36,000 was recorded. On January 1, 2019, Work Room exchanged the equipment for new equipment, paying $65,000 cash. The market value of the new equipment is $65,000. Prepare the journal entry to record this transaction. Assume the exchange had commercial substance. Omit explanation.
What will be an ideal response?
The overall objective of financial reporting is to provide information
a. that is useful for decision making. b. about an enterprise's assets, liabilities, and owners' equity. c. about an enterprise's financial performance during a period. d. that allows owners to assess management's performance.
The Morris Corporation acquired land, buildings, and equipment from a bankrupt company at a lump-sum price of $180,000 . At the time of acquisition, Morris paid $12,000 to have the assets appraised. The appraisal disclosed the following values: Land .................................................. $120,000 Buildings ............................................. 80,000 Equipment
............................................. 40,000 What cost should be assigned to the land, buildings, and equipment, respectively? a. $64,000, $64,000, and $64,000 b. $90,000, $60,000, and $30,000 c. $96,000, $64,000, and $32,000 d. $120,000, $80,000, and $40,000
Which of the following statements regarding international accounting standards for the impairment of tangible assets is correct?
a. Impairment losses cannot be subsequently reversed. b. Impairment losses can be subsequently reversed to the extent of the amount of the initial impairment loss. c. International accounting standards require a two-step test of impairment of a tangible asset. d. Accounting for impairments is not necessary since entities are required under international accounting standards to adjust the values of property, plant, and equipment to fair value at the end of each reporting period for which reports are prepared.