Suppose Stackpool Inc

question 28

Multiple Choice

Suppose Stackpool Inc.had inventory in Britain valued at 240,000 pounds one year ago.The exchange rate for dollars to pounds was 1£ = 2 U.S.dollars.This year the exchange rate is 1£ = 1.82 U.S.dollars.The inventory in Britain is still valued at 240,000 pounds.What is the gain or loss in inventory value in U.S.dollars as a result of the change in exchange rates?

• A) −$240,000
• B) −$43,200
• C) $0
• D) $43,200
• E) $47,473

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