When the Value of the British Pound Changes from $1

question 6

Multiple Choice

When the value of the British pound changes from $1.50 to $1.25,the pound has ________ and the dollar has ________.

• A) appreciated; appreciated
• B) depreciated; appreciated
• C) appreciated; depreciated
• D) depreciated; depreciated

---

Definitions:

Net Operating Income

The profit a company makes after deducting operating expenses but before interest and taxes.

Operating Loss

A situation where a company's total operating expenses exceed its total revenue, indicating a deficit in its core business operations.

Variable Costing

A cost accounting method that only includes variable production costs in the cost of goods sold, excluding fixed manufacturing overhead.

Net Operating Income

A measure of a company's profitability, calculated as the difference between its total revenue and its total operating expenses, excluding taxes and interest.