Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Your lovely mother-in-law, who loves waxing lyrically about your spouse's last paramour before meeting you, owns a successful business. She produces a product that when

Your lovely mother-in-law, who loves waxing lyrically about your spouse's last paramour before meeting you, owns a successful business.  She produces a product that when applied to the skin makes you a better person.  She claims to use it frequently.

 

She produces her product employing only inputs from the United States. Global sales, however, make up 60 percent of her total sales. 

 

She knows that you are currently taking a class in global finance and tells you such stuff is a waste of time for her since she sells all her products in dollars and so foreign exchange rates do not matter.  Explain to her with, a smile why they do matter.

 

Arguing that that the U.S. dollar was about to appreciate materially. 


Explain how that will impact your mother-in-laws business. It may be better, though, not to share your answer with her.

Step by Step Solution

3.46 Rating (166 Votes )

There are 3 Steps involved in it

Step: 1

Foreign exchange rates do matter for your motherinlaws business even though she sells her products i... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Income Tax Fundamentals 2013

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

31st Edition

1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516

More Books

Students also viewed these Finance questions