A U.S. firm buys merchandise from a Portuguese company at a cost of EUR 250,000.  The merchandise will not be delivered for six months and the U.S. firm does not have to pay for the product until it's delivered.  The current EURUSD exchange rate is 1.0500 U.S. dollars per euro.  If the EURUSD exchange rate moves to 1.1500 in six months, when the U.S. firm finally needs to make the payment, will the U.S. firm be paying more or less for the merchandise in U.S. dollar terms?  

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To determine whether the US firm will be paying more or less for the merchandise in US dollar terms ... View the full answer