A U.S. company has a subsidiary located in Great Britain. If the U.S. dollar is the functional currency and the British pound is appreciating relative to the dollar, what will happen to the following ratios after remeasurement? $$\begin{array} { l c c }
& \text { Inventory turnover } & \text { Net profit margin } \
\text { A) } & \text { Higher } & \text { Lower } \
\text { B) } & \text { Lower } & \text { Lower } \
\text { C) } & \text { Higher } & \text { Higher } \
\text { D) } & \text { Lower } & \text { Higher }
\end{array}$$

Question

A U.S. company has a subsidiary located in Great Britain. If the U.S. dollar is the functional currency and the British pound is appreciating relative to the dollar, what will happen to the following ratios after remeasurement? $$\begin{array} { l c c } 
& \text { Inventory turnover } & \text { Net profit margin } \
\text { A) } & \text { Higher } & \text { Lower } \
\text { B) } & \text { Lower } & \text { Lower } \
\text { C) } & \text { Higher } & \text { Higher } \
\text { D) } & \text { Lower } & \text { Higher }
\end{array}$$

Quizplus · Accepted Answer

The Answer of A U.S. company has a subsidiary located in Great Britain. If the U.S. dollar is the functional currency and the British pound is appreciating relative to the dollar, what will happen to the following ratios after remeasurement? $$\begin{array} { l c c } 
& \text { Inventory turnover } & \text { Net profit margin } \
\text { A) } & \text { Higher } & \text { Lower } \
\text { B) } & \text { Lower } & \text { Lower } \
\text { C) } & \text { Higher } & \text { Higher } \
\text { D) } & \text { Lower } & \text { Higher }
\end{array}$$

A US Company Has a Subsidiary Located in Great Britain