01.Core Concepts

• John invests $1 million in Orval, based in Mexico; conversion rate is 10 pesos to $1; He has invested 10 million pesos in Orval • He sells his interest for 15 million pesos; conversion rate is 12 pesos to $1 • He receives $1.25 million • Gain on investment: 50% (5 million pesos  10 million pesos) • Loss on conversion: 16.67% (10 pesos  12 pesos) • Total gain: 25% ($250,000  $1 million)