Palk Corporation has a foreign subsidiary located in a country experiencing high rates of inflation.Information concerning this country's inflation rate experience is given below. The inflation rate that is used in determining if the subsidiary is operating in a highly inflationary economy is
A)37.50%.
B)90.58%.
C)133.33%.
D)350.00%.

Question

Palk Corporation has a foreign subsidiary located in a country experiencing high rates of inflation.Information concerning this country's inflation rate experience is given below.  The inflation rate that is used in determining if the subsidiary is operating in a highly inflationary economy is
A)37.50%. 
B)90.58%. 
C)133.33%. 
D)350.00%.

Quizplus · Accepted Answer

According to the table provided, the cumulative inflation rate over the three-year period is 133.33%. If the subsidiary's inflation rate exceeds this threshold, it is considered to be operating in a highly inflationary economy. Therefore, the inflation rate that is used in determining if the subsidiary is operating in a highly inflationary economy is 133.33%.

Palk Corporation Has a Foreign Subsidiary Located in a Country