Question
A 2019 article on autonews.com reporting on Honda MotorCompany's profits noted thatunfavorable foreign exchange rates undercutearnings. Honda manufactures some cars in the United States and
A 2019 article on autonews.com reporting on Honda MotorCompany's profits noted that"unfavorable foreign exchange rates undercutearnings." Honda manufactures some cars in the United States and also exports some cars from Japan to the United States.
Source: HansGreimel, "Honda Profit Slides on ForeignExchange, Europe,Incentives," autonews.com, May8, 2019.
FromHonda's point ofview, what is an unfavorable exchange ratean exchange rate that requires more yen to buy one U.S. dollar or an exchange rate that requires fewer yen to buy one U.S.dollar? Briefly explain.
A.
More yen to buy one U.S.dollar, because it lowers the dollar price of Honda vehicles exported to the United States.
B.
Fewer yen to buy one U.S.dollar, because it lowers the dollar price of Honda vehicles exported to the United States.
C.
Fewer yen to buy one U.S.dollar, because it raises the dollar price of Honda vehicles exported to the United States.
D.
More yen to buy one U.S.dollar, because it raises the dollar price of Honda vehicles exported to the United States.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started