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One year ago, Mason Manufacturing, Inc. had inventory in Britain valued at 240,000 British pounds sterling....

One year ago, Mason Manufacturing, Inc. had inventory in Britain valued at 240,000 British pounds sterling. The exchange rate for dollars to pounds was 1 pound = 2 U.S. dollars. This year, the exchange rate is 1 pound = 1.82 U.S. dollars. The inventory in Britain is still valued at 240,000 British pounds.

What is the gain or loss in inventory value in U.S. dollars as a result of the change in exchange rates?

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Answer #1

Gain in inventory value in US dollars=240000*1.82-240000*2=-43200.00

Loss of $43200

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