Suppose One Year Ago, Hein Company Had Inventory in Britain

question 39

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 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