If a U.S. firm's sales in Australia are much greater than its cost of goods sold in Australia, the appreciation of the Australian dollar has a ____ impact on the firm's ____.
A) positive; interest expenses
B) positive; gross profit
C) negative; interest expenses
D) negative; gross profit

Question

​If a U.S. firm's sales in Australia are much greater than its cost of goods sold in Australia, the appreciation of the Australian dollar has a ____ impact on the firm's ____.
A) ​positive; interest expenses
B) ​positive; gross profit
C) ​negative; interest expenses
D) ​negative; gross profit

Quizplus · Accepted Answer

If the U.S. firm's sales in Australia are much greater than its cost of goods sold in Australia, then an appreciation of the Australian dollar would increase the value of those sales in U.S. dollar terms. This would result in a higher gross profit for the firm.

​If a US Firm's Sales in Australia Are Much Greater Than Its

If a US Firm's Sales in Australia Are Much Greater Than Its