AICPA Exam CPA-Business Topic 2 Question 76 Discussion

Actual exam question for AICPA's CPA-Business exam

Question #: 76
Topic #: 2

What is the effect when a foreign competitor's currency becomes weaker compared to the U.S. dollar?

AThe foreign company will have an advantage in the U.S. market.

BThe foreign company will be disadvantaged in the U.S. market.

CThe fluctuation in the foreign currency's exchange rate has no effect on the U.S. company's sales or cost of goods sold.

DIt is better for the U.S. company when the value of the U.S. dollar strengthens.

Show Suggested Answer

Suggested Answer: C

Choice 'c' is correct.

Choices 'a', 'b', and 'd' are incorrect, per the above calculation.

by Cory at Oct 19, 2023, 07:42 AM

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Rocco

2 months ago

This question is making me feel like a foreign exchange student. I'm just going to go with whichever option sounds the most exotic.

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Thurman

2 months ago

If the foreign currency is weaker, does that mean I can buy more souvenirs on my next trip abroad? Asking for a friend.

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Louvenia

21 days ago

So, it's a win-win situation for both the foreign company and your friend's souvenir shopping!

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Ozell

1 months ago

D) It is better for the U.S. company when the value of the U.S. dollar strengthens.

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Lashaun

2 months ago

Yes, that's correct. Your friend might get more souvenirs for less.

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Isabelle

2 months ago

A) The foreign company will have an advantage in the U.S. market.

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Lemuel

2 months ago

Option D is the way to go. A stronger U.S. dollar is always better for the American company, right? It's like getting a discount on foreign-made goods.

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Xuan

1 months ago

Definitely! A stronger dollar means better deals for American companies.

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Justine

1 months ago

D) It is better for the U.S. company when the value of the U.S. dollar strengthens.

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Elbert

1 months ago

A) The foreign company will have an advantage in the U.S. market.

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Elin

1 months ago

A) Yes, a stronger U.S. dollar means American companies can buy foreign goods at a lower cost.

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Arlette

2 months ago

D) It is better for the U.S. company when the value of the U.S. dollar strengthens.

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Abraham

2 months ago

A) The foreign company will have an advantage in the U.S. market.

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Valentin

3 months ago

This seems like a trick question. The fluctuation in the exchange rate affects both the U.S. and foreign companies, so option C can't be correct.

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Buffy

1 months ago

D) It is better for the U.S. company when the value of the U.S. dollar strengthens.

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Helaine

1 months ago

I think option A makes sense because a weaker currency means their products will be cheaper for U.S. consumers.

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Michael

2 months ago

A) The foreign company will have an advantage in the U.S. market.

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Tamala

3 months ago

I disagree, option B is correct. A weaker foreign currency means the foreign company's products become more expensive in the U.S. market, putting them at a disadvantage.

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Luisa

1 months ago

I disagree, option B is correct. A weaker foreign currency means the foreign company's products become more expensive in the U.S. market, putting them at a disadvantage.

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Paris

2 months ago

I think option A is correct. A weaker foreign currency gives the foreign company an advantage in the U.S. market.

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Artie

3 months ago

But wouldn't a weaker currency also mean lower profits for the foreign company?

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Verda

3 months ago

A weaker foreign currency gives the foreign company an advantage in the U.S. market. Their products become more affordable for American consumers. This is a no-brainer!

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