--%>

Conversion and competitive effects of exchange rate changes

Discuss the conversion and competitive effects of exchange rate changes on the firm’s operating cash flow.

E

Expert

Verified

Competitive effect : In this, exchange rate changes will affect the operating cash flows by altering the firm’s competitive position.

Conversion effect : Given operating cash flows in terms of the foreign currency may get converted to the lower or higher dollar (home currency) amounts since the exchange rate changes.

   Related Questions in Financial Accounting

  • Q : Describe JOC in accounting Describe JOC

    Describe JOC in accounting?

  • Q : Adjunct Account What do you mean by the

    What do you mean by the term Adjunct Account?

  • Q : Investing in dual currency bonds What

    What an investor should consider before investing in dual currency bonds?

  • Q : Asset-allocation funds Mutual funds

    Mutual funds that hold both bonds and stocks. Some asset-allocation funds follow specified allocation percentages and others take advantage of current condition. Those that take advantage of current condition is higher risk, because the fund manager tries to adjust the allocations to take advanta

  • Q : Time draft Explain how does time draft

    Explain how does time draft become a banker’s acceptance?

  • Q : Capitalization Method for Goodwill

    Capitalization Method: (Goodwill method): In this technique capitalized value of the firm is computed on the basis of normal rate of return. Difference between the capitalized value and real capital employed is termed as goodwill.

  • Q : Multiplicity-Creativity as process

    Define the term Multiplicity (Creativity as process) in creative industry ? And also state the different personality traits and intellectual aptitudes which might contribute to creative thinking ?

  • Q : Measures to avoid financial crisis In

    In integrated world financial market, financial crisis in country is rapidly transmitted to the other countries, resulting in the global crisis. State some of the measures would you propose in order to avoid the recurrence of the Asia-type crisis.

  • Q : What is Freight-in What is Freight-in

    What is Freight-in and what are its conditions?

  • Q : Asian firms building the production

    Since NAFTA was developed, several Asian firms particularly those from the Korea and Japan has made the extensive investments in the Mexico. Why do you think these Asian firms decided to build the production facilities in the Mexico?