Megatron Corp.earned net income of 13,000 Euros in its overseas branch at France.Its headquarters is located in the U.S.The rate of conversion during set up was $1.306 / Euro.What is the value of its income in its home currency if the rate is $1.508 / Euro at the end of a financial year and the average rate being $1.407 / Euro?
A) $16,060
B) $18,291
C) $14,070
D) $19,768

Question

Quizplus · Accepted Answer

To calculate the value of Megatron Corp.'s net income in its home currency, we need to use the exchange rates provided.

Using the setup exchange rate of $1.306 / Euro:

Net income in USD = €13,000 x $1.306 / € = $16,978

Using the average exchange rate of $1.407 / Euro:

Net income in USD = €13,000 x $1.407 / € = $18,291

Using the end-of-year exchange rate of $1.508 / Euro:

Net income in USD = €13,000 x $1.508 / € = $19,604

Therefore, the value of Megatron Corp.'s net income in its home currency is between $18,291 and $19,604. The only option that falls within this range is option B, $18,291.