Scenario: Color-Me-Green, Inc.
Color-Me-Green, Inc., a U.S.-based clothing merchant, has started doing business internationally. Having subsidiaries in several countries at year-end, the company must integrate the financial information from all its subsidiaries into the U.S. home office.
-Suppose country A has a currency called Pulse (P). At the beginning of the year, the exchange rate between the Pulse and U.S. dollar was P150/$. The inflation rate in country A is running at an annual rate of 250 percent where as inflation in the U.S. is running 2 percent. What would be the new exchange rate that Color-Me-Green can expect at the end of the year?

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The Answer of Scenario: Color-Me-Green, Inc.
Color-Me-Green, Inc., a U.S.-based clothing merchant, has started doing business internationally. Having subsidiaries in several countries at year-end, the company must integrate the financial information from all its subsidiaries into the U.S. home office.
-Suppose country A has a currency called Pulse (P). At the beginning of the year, the exchange rate between the Pulse and U.S. dollar was P150/$. The inflation rate in country A is running at an annual rate of 250 percent where as inflation in the U.S. is running 2 percent. What would be the new exchange rate that Color-Me-Green can expect at the end of the year?

Scenario: Color-Me-Green, Inc. Color-Me-Green, Inc., a U.S.-Based Clothing Merchant, Has Started Doing Business