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How is the net income based on US dollars affected

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Question - Imagine that a US based hospitality firm has a net income of €250,000 in Kiev, Ukraine. During the last fiscal year, the exchange rate has changed from $1.00/€0.80 to $.91/€0.80. The management of this US hospitality company would like to convert the net income represented by Euros to US dollars. During this conversion, how is the net income based on US dollars affected due to the changing exchange rate between Euro and US dollars?

a. $28,125 decrease in profits

b. $27,500 increase in profits

c. $28,125 increase in profits

d. $27,500 decrease in profits

Reference no: EM132849570

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