Gairdner Limited Has the Following Items in Its Statement of Profit

question 24

Multiple Choice

Gairdner Limited has the following items in its statement of profit or loss and other comprehensive income for the year ended 30 June 20X4: Revenue FC120 000,
Cost of goods sold FC50 000,
Other expenses FC16 000,
Income tax expense FC20 000.
All items were earned and incurred evenly across the year. The following exchange rates applied:
End of reporting period FC1 = $1.45
Average rate for year FC1 = $1.40
The net profit after tax translated into the presentation currency is:

• A) $47 600.
• B) $24 286.
• C) $23 448.
• D) $49 300.

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Definitions:

Replacement Cost

The current cost of replacing an asset with a similar one at its current market value.

Risk-Free Rate

The theoretical rate of return on an investment with zero risk, often represented by the yield on government securities like U.S. Treasury bonds.

Market Portfolio

A theoretical portfolio that contains all assets in the market, with each asset weighted according to its market capitalization.

Required Rate

The minimum annual percentage return that an investment must yield to be considered a viable option by an investor.