Question: Translation Exposure Atreides International has operations in Arrakis. The balance sheet for this division in Arrakeen solaris shows assets of 23,000 solaris, debt in the

Translation Exposure Atreides International has operations in Arrakis. The balance sheet for this division in Arrakeen solaris shows assets of 23,000 solaris, debt in the amount of 9,000 solaris, and equity of 14,000 solaris.

(a) If the current exchange rate is 1.20 solaris per euro, what does the balance sheet look like in euros?

(b) Assume that 1 year from now the balance sheet in solaris is exactly the same as at the beginning of the year. If the exchange rate is 1.40 solaris per euro, what does the balance sheet look like in euros now?

(c) Rework part

(b) assuming the exchange rate is 1.12 solaris per euro.

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