A company is based in Country Y whose functional currency is YS.

Profit after tax in Country Z = ZS20m (tax rate in Z = 30%).

Let pre-tax profit = PPP.

0.7P=20⇒P=200.7≈28.57m ZS0.7P = 20 \Rightarrow P = \frac{20}{0.7} \approx 28.57\text{m ZS}0.7P=20⇒P=0.720​≈28.57m ZS

Country Y’s tax rate = 60%, with full double tax relief.

Total tax on P should be 0.6P0.6P0.6P, so after all tax:

Net profit=0.4P=0.4×28.57≈11.43m ZS\text{Net profit} = 0.4P = 0.4 \times 28.57 \approx 11.43\text{m ZS}Net profit=0.4P=0.4×28.57≈11.43m ZS

Exchange rate: YS1 = ZS5 → 1 ZS = 0.2 YS.

Net profit in YS=11.435≈2.29m YS\text{Net profit in YS} = \frac{11.43}{5} \approx 2.29\text{m YS}Net profit in YS=511.43​≈2.29m YS

Answer: A. YS2.29 million