Scenario: Just-for-Kids, Inc.
Just-for-Kids, Inc. is a toys and clothes manufacturer based in San Diego, California. The company has received an inquiry from an overseas company to do business. Tom Dodd is the owner of the company researching the opportunity and how exchange rates will affect its international business activities.
-If Just-for-Kids is selling in a country with a strong currency while sourcing from a country with a weak currency, it will ________.

Question

Quizplus · Accepted Answer

Selling in a country with a strong currency while sourcing from a country with a weak currency will allow Just-for-Kids to improve its profits, as it can purchase goods at a lower cost in the weak-currency country and sell them at a higher price in the strong-currency country.

Scenario: Just-For-Kids, Inc. Just-For-Kids, Inc. Is a Toys and Clothes Manufacturer Based in Manufacturer