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Last year leather boot, Inc. had investments in Paris worth 500,000 euros. At that time, the euro was worth $1.20. Today the euro is trading for $1.30. What is the gain or loss in value of the inventory expressed in dollars and in euros?

Respuesta :

Answer:

Gain in USD = 50000

Gain or Loss in EUR = 0

Explanation:

given data

investments = 500,000 euros

before euro = $1.20

now euro = $1.30

to find out

gain or loss in value of the inventory expressed in dollars and in euros

solution

we get Gain or Loss in USD = Euro amount × current exchange rate - Euro amount × old exchange rate     ..................1

put here value

Gain or Loss in USD = 500000 × 1.30 - 500000 × 1.20

gain = 50000

and

Gain or Loss in EUR = current euro amount - old euro amount     .......2

put here value we get

Gain or Loss in EUR = 500000 - 500000 = 0

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