Suppose One Year Ago,Hein Company Had Inventory in Britain Valued

question 11

Multiple Choice

Suppose one year ago,Hein Company had inventory in Britain valued at 240,000 pounds.The exchange rate for dollars to pounds was 1£ = 2.00 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 U.S.dollar gain or loss in inventory value as a result of the change in exchange rates?

• A) -$43,200.00
• B) -$48,816.00
• C) -$36,288.00
• D) -$50,544.00
• E) -$32,400.00

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Definitions:

Gold Standard

A financial regime in which the value of a nation's currency or banknotes is directly tied to the value of gold.

Balance of Payments

A financial statement summarizing a country's transactions with the rest of the world over a specified period, including trade, investment, and financial transfers.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting wear and tear or obsolescence.

Balance Of Trade

The difference between a country's exports and imports of goods, without including services.