If the European Subsidiary of a U

question 5

Multiple Choice

If the European subsidiary of a U.S. firm has net exposed assets of €500,000, and the euro drops in value from $1.40/euro to $1.30/€ the U.S. firm has a translation ________.

• A)gain of $50,000
• B)loss of $50,000
• C)gain of $450,000
• D)loss of €450,000

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Definitions:

Landowners

Individuals or entities that hold legal title or ownership of land.

Pure Economic Rent

The income derived from the inherent value of a natural resource or location, excluding any income attributed to improvements or human intervention.

Input

Resources used in the production process, including labor, capital, and materials.

Reliability

The extent to which an assessment, test, or measurement can consistently produce the same results under the same conditions.