The Latimore Company invested $8.5 million in a new plant in Italy when the exchange rate was 1.1500 euros to the dollar. At the end of the year, the rate was 1.2000 euros to the dollar.
a. Did Latimore make or lose money on the exchange rate movement? If so, how much?
b. What kind of exchange rate gain or loss was it?
c. What was the tax impact?