Answer. Black & Decker has a rough balance between foreign sales and costs. Thus, as the dollar appreciates, both its sales revenue and its costs decline approximately in line with each other. This means that its profits will decline roughly in line with the rise of the dollar. (If both revenues and costs fall, say, 10%, then profit must also fall by 10%.) Dollar depreciation leads to corresponding increases in dollar revenues and costs. The bottom line is that B&D’s profits fall as the dollar rises and rise as the dollar  falls. If B&D didn’t produce overseas, but instead exported from its U.S. plants, then currency changes would lead to much greater swings in its profits. Note that B&D’s domestic profitability is also affected by currency changes since it faces competition in the U.S. from foreign companies such as Japan’s Makita.