On january 1, year 1, kiner company formed a foreign branch. the branch purchased merchandise at a cost of 720,000 local currency units (lcu) on february 15, year 1. the purchase price was equivalent to $180,000 on this date. the branch’s inventory at december 31, year 1, consisted solely of merchandise purchased on february 15, year 1, and amounted to 240,000 lcu. the exchange rate was 6 lcu to $1 on december 31, year 1, and the average rate of exchange was 5 lcu to $1 for year 1. assume that the lcu is the functional currency of the branch. in kiner’s december 31, year 1 balance sheet, the branch inventory balance of 240,000 lcu should be translated to united states dollars at

scenario: hawaii and south carolina are trading partners. hawaii has an absolute advantage in the production of both coffee and tea. the opportunity cost of producing 1 pound of tea in hawaii is 2 pounds of coffee, and the opportunity cost of producing 1 pound of tea in south carolina is 1/3 pound of coffee. which of the following statements is true? a. south carolina should specialize in the production of both tea and coffee. b. hawaii should specialize in the production of tea, whereas south carolina should specialize in the production of coffee. c. hawaii should specialize in the production of coffee, whereas south carolina should specialize in the production of tea. d. hawaii should specialize in the production of both tea and coffee.