Question: Streep Inc. is a U. S. based multinational firm with a subsidiary in Switzerland. Last week, Streep created its periodic financial statements, and the subsidiary

Streep Inc. is a U. S. based multinational firm with a subsidiary in Switzerland. Last week, Streep created its periodic financial statements, and the subsidiary had SFR80,000 worth of inventory on its balance sheet. Streep translated the value of inventory using the spot exchange rate at the time os $0.8153/SFr and recorded that value on its condolidated balance sheet. However, this week the exchange rate changed dramatically to $0.9225/SFr. The subsidiary still has the same amount of inventory (valuued at SFr 80,000).

If the firm were to create a new consolidated balance sheet and translate the value of its inventory at the new spot exchange rate, what would happen to the dollar value of inventory?

It would increase/decrease by how much?

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