# Tristan Narvaja, S.A., is the Uruguayan subsidiary of a U.S. manufacturing company. Its balance sheet for January 1 follows. The January 1 exchange rate between the U.S. dollar and the peso Uruguayo (\$U) is \$U20/\$. Determine Tristan Narvaja's contribution to

Tristan Narvaja, S.A., is the Uruguayan subsidiary of a U.S. manufacturing company. Its balance sheet for January 1 follows. The January 1 exchange rate between the U.S. dollar and the peso Uruguayo (\$U) is \$U20/\$. Determine Tristan Narvaja's contribution to the translation exposure of its parent on January 1, using the current rate method.

a. Determine Montevideo's contribution to the translation exposure of its parent on January 1st, using the current rate method.
b. Calculate Montevideo's contribution to its parent's translation loss if the exchange rate on December 31st is \$U20/US\$. Assume all peso Uruguayo accounts remain as they were at the beginning of the year.

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...