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Exchange rate based on the international company’s location

Published by admin at September 8, 2022
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  • Development
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  • Exchange rate based on the international company's location

 

Choose an international company on which to base your discussion. Find the current exchange rate based on the international company’s location. How would the appreciation or depreciation of the dollar affect the foreign operations of the company? As a manager of the company, how might you try to capitalize on expected exchange rate movements? Be specific, and give examples.

 

Sample Solution

I have chosen Apple Inc. as the international company to base my discussion on. According to Google Finance, the current exchange rate between US Dollars (USD) and Euros (EUR), based on Apple’s location in Cupertino, CA USA, is 1 USD = 0.85 EUR. If the value of the US Dollar appreciates against other currencies, then it will become cheaper for foreign customers to buy Apple products denominated in USD; however if the value of the US Dollar depreciates then it will become more expensive for foreign customers to buy these same products. This could ultimately affect Apple’s foreign operations by decreasing their revenues or profits due to decreased sales or higher costs associated with purchasing components from overseas suppliers that are priced in a different currency than what is used domestically.

This appreciation or depreciation of currency could also further impact Apple’s financial statements when translating international earnings into U.S dollars at quarter-end or year-end close periods due to differences in rates between time periods when transactions were made versus when they are reported on financial statements (i.e., translation risk). Ultimately, companies such as Apple need to be aware of changes in exchange rates and how this affects both their domestic and foreign performance so that they can adjust accordingly with strategies such as hedging against currency fluctuations where necessary1.

1 Vinzant & Leechongco.(2019). The effects of currency appreciation and depreciation: A corporate perspective.. Retrieved October 8th 2020 from https://www.investopedia.com/articles/forex/090115/effects-currency-appreciation-depreciation-corporate-perspective.

the noble motivations of war, in particular, is when damage is caused yet he causes notice the damage doesn’t prompt conflict, it relies upon the degree or proportionality, one more condition to jus promotion bellum (Begby et al (2006b), Page 314). Frowe, in any case, contends the possibility of “worthwhile motivation” in light of “Sway” which alludes to the assurance of political and regional freedoms, alongside basic liberties. In contemporary view, this view is more confounded to reply, given the ascent of globalization. Also, it is challenging to quantify proportionality, especially in war, on the grounds that not just that there is an epistemic issue in computing, however again the present world has created (Frowe (2011), Page 54-6). Besides, Vittola contends war is essential, not just for guarded purposes, ‘since it is legitimate to oppose force with force,’ yet in addition to battle against the uncalled for, a hostile conflict, countries which are not rebuffed for acting treacherously towards its own kin or have unjustifiably taken land from the home country (Begby et al (2006b), Page 310&313); to “show its foes a thing or two,” however principally to accomplish the point of war. This approves Aristotle’s contention: ‘there should be battle for harmony (Aristotle (1996), Page 187). Nonetheless, Frowe contends “self-preservation” has a majority of depictions, found in Chapter 1, demonstrating the way that self-protection can’t necessarily legitimize one’s activities. Considerably more dangerous, is the situation of self-preservation in war, where two clashing perspectives are laid out: The Collectivists, a totally different hypothesis and the Individualists, the continuation of the homegrown hypothesis of self-protection (Frowe (2011), Page 9& 29-34). All the more critically, Frowe discredits Vittola’s view on retaliation in light of the fact that right off the bat it engages the punisher’s power, yet additionally the present world forestalls this activity between nations through legitimate bodies like the UN, since we have modernized into a moderately quiet society (Frowe (2011), Page 80-1). Above all, Frowe further discredits Vittola through his case that ‘right goal can’t be blamed so as to take up arms in light of expected wrong,’ recommending we can’t simply hurt another on the grounds that they have accomplished something vile. Different variables should be thought of, for instance, Proportionality.

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