AN US FIRM OWNS A FOREIGN SUBSIDIARY IN INDIA. IN 2014, SALES WERE...

3. An US firm owns a foreign subsidiary in India. In 2014, sales were INR 10,000,000 and the INR/USD exchange rate was 60. In 2015, the sales remained constant at INR 10.000,000 but the exchange rate was 65. What will be the impact of the change in the value of the USD on the parent company’s translated sales? A. Sales will increase by 7.69%. B. Sales will decrease by 7.69%. C. Sales will decrease by 9.64%. LO.d: Compare the current rate method and the temporal method, evaluate how each affects the parent company’s balance sheet and income statement, and determine which method is appropriate in various scenarios.