thank you 2 pts Fargo, Inc. is a U.S. based MNC whose Japanese subsidiary earned
ID: 2539811 • Letter: T
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2 pts Fargo, Inc. is a U.S. based MNC whose Japanese subsidiary earned 1 Billion Japanese yen (UPY) in both years 1 and 2. The weighted average exchange rates for years 1 and 2 are $0.009 and $0.012, respectively. What will be the impact of the exchange rate effect on the translated U.S. dollar earnings of the Japanese subsidiary? Time R Attempt c 31 Min The year 2 value would be $3 Million higher owing to the fact that the U.S dollar has depreciated against the JPY The year 1 value would be $3 Million lower owing to the fact that the JPY has depreciated against the U.S. dollar O The year 2 value would be $3 Million lower owing to the fact that the U.S dollar has depreciated against the JPY O The year 2 value would be $3 Million higher owing to the fact that the U.S. dollar has appreciated against the JPYExplanation / Answer
Exchange rates in:
Year 1 = $0.009 per Japanese Yen
Year 2 = $0.012 per Japanese Yen
Dollar is depreciated by $0.003 per Japanese Yen (0.012-0.009)
So in Year 2, the earning will be lower by $3 Million ( $0.003* 1 Billion Japanese yen)
Answer 3) The Year 2 value would be $3 Million lower owing to the fact that the US dollar has depreciated against the JPY.
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