inflation and zambian kwacha zmk devaluation is 30 percent per month or 1 2 percent 543874

Assume the following:

• Inflation and Zambian kwacha (ZMK) devaluation is 30 percent per month, or 1.2 percent per workday.
• Foreign exchange rates at selected intervals for the current month are:

• The real rate of interest is 1.5 percent per month, or 20 percent per year.
• Cash balances are kept in hard currency (dollars).
• Month-end rates are used to record expense transactions.

Required: Based on these assumptions, prepare a table showing the distortions that can occur when expense transactions totaling ZMK 1,000,000 are recorded using conventional measurement rules (i.e., month-end rates in this example) instead of the internal reporting structure recommended in this chapter.