A U. S. company’s foreign subsidiary had these amounts in local currency units (LCU) in 2017: Cost of goods sold LCU 5,800,000 Beginning inventory 505,000 Ending inventory 613,000 The average exchange rate during 2017 was $1.20 = LCU 1. The beginning inventory was acquired when the exchange rate was $1.00 = LCU 1. Ending inventory was acquired when the exchange rate was $1.30 = LCU 1. The exchange rate at December 31, 2017, was $1.35 = LCU 1. Assuming that the foreign country is highly inflationary, at what amount should the foreign subsidiary’s cost of goods sold be reflected in the U. S. dollar income statement?

You and your new australian bride matilda, are applying for a loan and are required to submit a balance sheet with your net worth. you own a 2008 toyota camry that you bought last month for $9,995. the kelly blue book value for this car is $13,995. you owe $8,150 on the car loan for the camry. you pay off your visa credit card every month and have not paid any credit card interest this year. the current visa credit card balance is $3,522, and the next statement is due in 15 days. you have a student loan balance of $6,500. you presently have $425 in your checking account and $1,540 in your savings account. you own 100 shares of ibm stock that you purchased for $85.50 per share. one share of ibm is now selling for $158.42. you own computers and other electronics that you purchased for $4,100 but could probably sell today on e-bay for $1,800. your gross income is $80,000 per year. what is your current net worth? (see wb ch. 2 example 2.3)

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Afirm’s production function is represented by q(m,r) = 4m 3/4r1/3, where q denotes output, m raw materials, and r robots. the firm is currently using 6 units of raw materials and 12 robots. according to the mrts, in order to maintain its output level the firm would need to give up 2 robots if it adds 9 units of raw materials. (a) true (b) false