Springfield Co., based in the U.S., has a cost from orders of foreign material that exceeds its foreign revenue. All foreign transactions are denominated in the foreign currency of concern. This firm would ____ a stronger dollar and would ____ a weaker dollar.

Question

Quizplus · Accepted Answer

Springfield Co. would benefit from a stronger dollar because it would reduce the cost of foreign material denominated in foreign currency. Conversely, a weaker dollar would increase the cost of foreign material, adversely affecting the company.