If a U.S. firm's cost of goods sold exposure is much greater than its sales exposure in Switzerland, there is a ____ overall impact of the Swiss franc's depreciation against the dollar on ____.

Question

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When a U.S. firm's cost of goods sold (COGS) exposure is much greater than its sales exposure in Switzerland, a depreciation of the Swiss franc against the dollar means that the cost of goods sold in francs becomes cheaper when converted back to dollars, while the impact on sales revenue is less pronounced. This leads to a higher gross profit margin, hence a positive impact on gross profit.

If a US Firm's Cost of Goods Sold Exposure Is Much Greater