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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Lemuel

2 days 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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Valentin

9 days 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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Michael

1 days ago

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

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Tamala

18 days 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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Artie

25 days ago

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

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Verda

26 days 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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