Which company’s growth objective is most sensitive to a movement in the EUR/K$ exchange rate?

Companies A, B, C and D:

• are based in a country that uses the K$ as its currency.

• have an objective to grow operating profit year on year.

• have the same total levels of revenue and cost.

• trade with companies or individuals in the eurozone. All import and export trade with companies or individuals in the eurozone is priced in EUR.

Typical import/export trade for each company in a year are as follows:

Which company’s growth objective is most sensitive to a movement in the EUR/K$ exchange rate?
A . Company A
B . Company B
C . Company C
D . Company D

View Answer

Answer: B