_____ at 12/31/06, When the Direct Spot Exchange Rate Was

Multiple Choice

_____ At 12/31/06, when the direct spot exchange rate was $.005, a foreign subsidiary reported the following analysis of its year-end inventory and exchange rates existing when the inventory was purchased:
If the functional currency is the foreign currency, at what amount should the inventory be reported in U.S. dollars?

A) $20,000
B) $25,000
C) $27,500
D) $28,000
E) $30,000