A U.S. company that makes sheet rock enters into a long-range contract to buy 1,000,000lbs. of gypsum each month from a mine in Mexico. Suppose the exchange rate for the Mexican peso changes from 10.20 pesos per dollar to 10.85 pesos per dollar. What effect will this have on the profits of the U.S. company?

Answer rating: 100% (QA)

The effect of the exchange rate change on the profits of the US company will depend on whether t... View the full answer