Illustrate with a simple example the effect of offsetting between the exchange rates.

Questions 11 to 15 relate to the following income statement for YTR plc.

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GBPEUR 1.2 GBPBHD 0.51 Foreign s Bahraini Domestic Total Dinar (BHD) s Sales 150,000 100,000 120,000 441,078 Cost of sales 120,000 270,000 370,000 Gross profit 71,078 Expenses 5,000 20,000 10,000 53,382 Net profit 17,696