If a Canadian-based MNC with a subsidiary in Mexico expects the Mexican currency to appreciate in value relative to the Canadian dollar, local customers' accounts receivable would be increased and accounts payable would be reduced if at all possible.

Question

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If the Mexican currency appreciates relative to the Canadian dollar, it means that the Canadian dollar can buy fewer Mexican pesos. This would increase the value of local customers' accounts receivable (in pesos) when converted to Canadian dollars. On the other hand, accounts payable (paid in pesos) would be reduced in value when converted to Canadian dollars, so it would be beneficial to pay them off as soon as possible.

If a Canadian-Based MNC with a Subsidiary in Mexico Expects