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A recent article states that Kaman (a CT manufacturer) has invested in facilities in Germany. Given...

A recent article states that Kaman (a CT manufacturer) has invested in facilities in Germany. Given the weakening U.S. dollar was that an appropriate decision? Why or why not?

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The decision is very appropriate and a profit motive approach in the weakening U.S. dollar environment. This is because if you invest in a company that does the majority of its business in the Germany then the functional and reporting currency will be the German Euro. So, when the Kaman translates the income results to it's home currency (the U.S. dollar), the dollar/euro exchange rate must be used. Therefore, as you translate the foreign income into the falling U.S. dollar environment, the company benefits from this translation gain with higher net income.

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