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Refer to the Scenario Below to Answer the Following Questions

question 97

Multiple Choice

Refer to the scenario below to answer the following questions.
In the 1990s, Millie was only a small town in Northeastern Taiwan with a Woodcraft Museum, a shoe store, a small restaurant, a grocery store and several woodcraft stores. Over the next three decades, the small town transformed into an international tourist attraction, attracting thousands of tourists who are intrigued with the lifestyle of Millie's largest population, the Pinpu. Ben and Mary Chen, having grown up within the locality of Millie, decided to capitalize on their town's popularity and their woodworking skills. Their shop, Pinpu Wood, began with a small display of handmade rocking chairs, Ben Chen's specialty. But within a few months, the display at Pinpu Wood included picnic tables, flower boxes, wooden statues and small handmade novelty items. No other shop offers the same. Mary Chen decorated the shop's display room with authentic Pinpu décor and eventually hired three Pinpu friends to sew and embroider napkins and other textiles per customer request. In addition, two women from the Pinpu community sought permission to display home-baked pastries and dumplings on Saturdays and Sundays, the town's busiest tourist days, when Millie attracted swarms of visitors to its flea market on the south edge of town. "Millie is full of specialty shops," Mary Chen stated. "People don't come here to buy things made in France or the United States. They want real, Pinpu-made goods."
-Which of the following is most critical to Pinpu Wood's success?

Definitions:

Exchange Gain

The gain resulting from a favorable change in exchange rates affecting the value of foreign currency transactions.

Accounts Receivable

Money owed by customers to a company for goods or services that have been delivered or used but not yet paid for.

Functional Currency

The primary currency of the primary economic environment in which an entity operates, usually the local currency or the currency of the main revenue-generating activities.

Translation Rate

The exchange rate used to convert the financial statements of a foreign subsidiary into the currency of the parent company.