Companies such as Coca-Cola generate more than half their annual revenues from sales outside the United States, including Europe. If the dollar gets stronger relative to the euro, what will be the financial impact on the company?
A) Overall earnings will decrease.
B) Earnings will decrease in euros, but increase in dollars.
C) Overall earnings will increase.
D) Earnings will increase in euros, but decrease in dollars.

Question

Quizplus · Accepted Answer

A stronger dollar means that when the company converts its foreign earnings back into dollars, the value will be less, leading to a decrease in overall earnings.

Companies Such as Coca-Cola Generate More Than Half Their Annual