A U.S.firm owns 100% of a Japanese automobile manufacturer.The cost of automobile parts is typically 75% of the firm's total product.In which of the following circumstances would neither the U.S.dollar nor the Japanese yen be considered the functional currency?

Question

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Neither the U.S. dollar nor the Japanese yen would be considered the functional currency if the Japanese firm buys German automobile parts with euros to produce cars sold in Latin America for euros. This is because the euro is the currency used to purchase the parts and to receive payment for the cars sold, which makes it the functional currency for the transaction.

A USFirm Owns 100% of a Japanese Automobile Manufacturer