Table 3-28 Barb and Jim Run a Business That Sets Up and Up

question 280

Multiple Choice

Table 3-28
Barb and Jim run a business that sets up and tests computers. Assume that Barb and Jim can switch between setting up and testing computers at a constant rate. The following table applies.
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-Refer to Table 3-28. Barb's opportunity cost of testing one computer is setting up

• A)4/5 computer and Jim's opportunity cost of testing one computer is setting up 3/4 computer.
• B)4/5 computer and Jim's opportunity cost of testing one computer is setting up 4/3 computers.
• C)5/4 computers and Jim's opportunity cost of testing one computer is setting up 3/4 computer.
• D)5/4 computers and Jim's opportunity cost of testing one computer is setting up 4/3 computers.

Comprehend the causes of accounting exposure to changes in foreign exchange rates.

Grasp the impact of currency realignment on the earnings ability of a foreign operation.

Determine the primary factors for choosing a functional currency.

Understand the differences between the temporal method and the current rate method in financial translation.