As the vice president of finance for a U.S. firm, what do you say to your production manager when he states, "We shouldn't let foreign exchange risk interfere with our profitability

Let's simply invoice all our foreign customers in dollars and be done with it."

The production manager is poorly informed. Whenever goods are sold across borders of countries that use different currencies, there will be foreign exchange risk that must be born by someone. If your firm invoices only in dollars, you may lose export sales that would go to importers that are not willing to bear the risk. Other competitors of yours may be more flexible and willing to invoice in the local currency. The important point is that the foreign exchange risk is present and must be managed by someone. Why not by you – the trained international finance expert!