_____ on 1/1/06, a Foreign Unit Acquired Equipment Costing 100,000

Multiple Choice

_____ On 1/1/06, a foreign unit acquired equipment costing 100,000 local currency units (equivalent to $50,000 on that date) . During 2006, the foreign country had 25% inflation and the United States had 10% inflation. On 12/31/06, the direct exchange rate was $.39. At what the amount would the fixed asset be expressed in U.S. dollars under the PPP current-value approach?

A) $39,000
B) $40,000
C) $44,000
D) $48,750
E) $55,000