Arkadelphia Polymers, Inc., earns 60% of its revenue from exports to Europe and Asia. The CEO of the company would be
A) concerned if the value of the dollar strengthened.
B) pleased if the value of the dollar strengthened.
C) unconcerned about the fluctuation in the value of the dollar because the company is widely diversified geographically.
D) likely to consider moving to international strategic alliances or acquisitions if the value of the dollar fell and remained low.

Question

Quizplus · Accepted Answer

Since Arkadelphia Polymers, Inc. earns a majority of its revenue from exports, a stronger dollar would make their products more expensive for foreign buyers, which could lead to a decrease in demand for their products and, consequently, a decrease in revenue for the company. Therefore, the CEO would be concerned if the value of the dollar strengthens.