Answer to Question #187800 in Economics for steven

Question

If a company is based on Canada but makes most of its sales in USD, with the remainder in CAD. What would happen to the company's costs and revenue if the USD appreciated relative to CAD?

Answer 1

If the US dollar rises against the Canadian dollar, then a company that is based in Canada but does most of its sales in US dollars and the rest in Canadian dollars, the company's costs will decrease as most of its costs are incurred in Canada.