Changes in foreign exchange rates can affect a firm in all of the following ways except :
A) The prices a firm pays to acquire raw materials from suppliers abroad.
B) The amount of cash a firm receives when it collects an account receivable, a loan receivable, or another receivable denominated in a currency other than its own.
C) The value of domestic liabilities with fixed interest rates.
D) The prices a firm charges for products sold to customers abroad.

Question

Quizplus · Accepted Answer

Changes in foreign exchange rates can affect a firm in all of the other ways listed. When a firm pays for raw materials from suppliers abroad or receives payment for goods sold to customers abroad, the exchange rate can impact the price invoiced or received in the local currency. This can impact profitability and cash flow. However, domestic liabilities with fixed interest rates are not impacted by changes in foreign exchange rates as the rate has already been fixed.

Changes in Foreign Exchange Rates Can Affect a Firm in All