Exchange rates can influence the ability of a firm profitably to remove profits from foreign countries.

Question

Quizplus · Accepted Answer

Exchange rates can directly impact the profitability of a firm operating in foreign countries. If the exchange rate of a foreign currency increases, it becomes more expensive for the firm to remove profits from that country. Conversely, if the exchange rate decreases, it becomes easier and more profitable for the firm to repatriate profits. Therefore, exchange rates can have a significant impact on a firm's bottom line.

Exchange Rates Can Influence the Ability of a Firm Profitably