Hanover Inc. spent 11.5 million building a factory in England several years ago when the British Pound cost $1.5500. The plant operation was set up as a British Subsidiary to manufacture Hanovers product for sale and distribution in the U.K. and Europe. Hanover closed its consolidated books for the 2015 fiscal year on September 16, 2015. (Many companies keep their books on fiscal years that dont coincide with calendar years.) Hanover is subject to a 40% tax rate in the U.S. and a 45% rate in the U.K.

Table 18.1

EX Rates May 6, 2015
	Direct Quote	Indirect Quote
UK(british pound)	1.5246	0.6559
Europe(euro)	1.1345	0.8814

a. How much did Hanover make or lose on the value of its English factory due to Exchange Rate movements in the years since it was built? Use table 18.1. b. Explain the tax impact of the gain or loss? c. Where does the gain or loss show up in Hanovers Financial Statements? Where doesnt it show up in 2015 or in previous years.