Question

Jordan Inc., a U.S. company, is required to translate into U.S. dollars the foreign currency income generated by its foreign branch. To determine U.S. taxable income, what must Jordan use to translate the net income of its foreign branch into U.S. dollars?

Answer 1

Answer:

The correct answer is: The average exchange rate of the year.

Explanation:

The average exchange rate indicates how much is translated from one currency to another its a net worth equivalence, but it's not constant, it fluctuates a lot, therefore the need to use an average rate. Now in this case to correctly translate to U.S dollars Jordan's net income of its foreign branch it's needed he uses the conversion rate indicated in the Average exchange rate and in this case of the year.