If a U. S. Company purchases inventory on account for $32,000 euros from a British Company when the exchange rate is $1 to $1.28 euros, how would the U.S. Company recognize the inventory and the accounts payable?
a. inventory of $32,000 and accounts payable of $32,000
b. inventory of $25,000 and accounts payable of $32,000 with a $7,000 foreign currency loss
c. inventory of $25,000 and accounts payable of $25,000
d. inventory of $32,000 and accounts payable of $25,000 with a $7,000 foreign currency gain
c
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A) a direct approach B) a panel C) an indirect approach D) a survey E) a masked approach
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A) matching the maturity of the source of financing to the cash flow generating characteristics of the asset being financed B) speculation regarding the direction of short-term interest rates C) protecting the firm against the risk of rising interest rates D) the usage of interest rate swaps