Photo AI
In 2010 an Australian company bought products from the USA - HSC - SSCE Business Studies - Question 15 - 2010 - Paper 1
Question 15
In 2010 an Australian company bought products from the USA. If the Australian dollar rises in value against the US dollar before the payment is made, which of the f... show full transcript
Worked Solution & Example Answer:In 2010 an Australian company bought products from the USA - HSC - SSCE Business Studies - Question 15 - 2010 - Paper 1
Step 1
The company will have more funds available for other uses.
Answer
When the Australian dollar appreciates against the US dollar, it means that fewer Australian dollars are required to purchase the same amount of products priced in US dollars. As a result, the company would effectively pay less for the imported goods. This increased purchasing power allows the company to retain more funds, which can then be utilized for other investments or operational needs.