Suppose one year ago,Hein Company had inventory in Britain valued at 229,000 pounds.The exchange rate for dollars to pounds was 1£ = 2.00 U.S.dollars.This year the exchange rate is 1£ = 1.82 U.S.dollars.The inventory in Britain is still valued at 229,000 pounds.What is the U.S.dollar gain or loss in inventory value as a result of the change in exchange rates?
A) -$41,220.00
B) -$50,700.60
C) -$36,273.60
D) -$47,403.00
E) -$47,815.20

Question

Quizplus · Accepted Answer

The correct answer is A.The U.S. dollar value of the inventory one year ago was 229,000 pounds * 2.00 U.S. dollars per pound = 458,000 U.S. dollars.The U.S. dollar value of the inventory this year is 229,000 pounds * 1.82 U.S. dollars per pound = 416,780 U.S. dollars.The U.S. dollar loss in inventory value is 458,000 U.S. dollars - 416,780 U.S. dollars = $41,220.00.

Suppose One Year Ago,Hein Company Had Inventory in Britain Valued