Rockford Co. is a U.S. manufacturing firm that produces products in the United States and sells all the products to retail stores in the United Kingdom; the sales are denominated in pounds. It finances a small portion of its business with pound-denominated loans from British banks. Assume that the amount of products to be sold is guaranteed by contracts. The dollar value of sales is:

1. higher if the pound depreciates against the dollar.

2. unaffected by the pound's exchange rate.

3. lower if the pound depreciates against the dollar.

4. affected in either direction by the pound's exchange rate, but the direction is not definite.