Assume the exchange rate for the Mexican Peso is falling relative to the U.S.dollar.An American company will incur losses from this falling exchange rate if the company is making:

Question

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If the American company makes credit sales to Mexican companies at prices stated in Mexican Pesos, the falling exchange rate means they will receive fewer U.S. dollars when the Pesos are converted, leading to losses.

Assume the Exchange Rate for the Mexican Peso Is Falling