A U.S.dash-based company that exports goods and has accounts receivable denominated in a foreign currency ________....
A
U.S.dash-based
company that exports goods and has accounts receivable denominated in a foreign currency ________.
A.
faces no risk if the relations between the countries get rough
B.
faces the risk that the U.S. dollar will depreciate in value relative to the foreign currency
C.
faces the risk that the U.S. dollar will appreciate in value relative to the foreign currency
D.
faces the risk that the foreign currency would appreciate in value relative to the U.S dollar
Homework Answers
Correct option is > C. faces the risk that the U.S. dollar will appreciate in value relative to the foreign currency
An US based exporter would always benefit from depreciation on US dollar and an appreciation in US dollar would be unfavorable because exporters income will fall due to appreciation in dollar.
Add Answer to:
A
U.S.dash-based
company that exports goods and has accounts receivable
denominated in a foreign currency ________....
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transactions:
On November 1, 20X6, Merchant sold goods to a company located
in Munich, Germany. The receivable was to be settled in European
euros on February 1, 20X7, with the receipt of €290,000 by Merchant
Company.
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Merchant Company had the following foreign currency
transactions:
On November 1, 20X6, Merchant sold goods to a company located
in Munich, Germany. The receivable was to be settled in European
euros on February 1, 20X7, with the receipt of €290,000 by Merchant
Company.
On November 1, 20X6, Merchant purchased machine parts from a
company located in Berlin, Germany. Merchant is to pay €145,000 on
February 1, 20X7.
The direct exchange rates are as follows:
November 1, 20X6
€1 = $...
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