Question Details

Lubbock, Inc., produces furniture and has no international business 


1.	Economic Exposure. Longhorn Co. produces hospital equipment. Most of its revenues are in the United States. About half of its expenses require outflows in Philippine pesos (to pay for Philippine materials). Most of Longhorn- competition is from U.S. firms that have no international business at all. How will Longhorn Co. be affected if the peso strengthens?
2.	Economic Exposure. Lubbock, Inc., produces furniture and has no international business. Its major competitors import most of their furniture from Brazil and then sell it out of retail stores in the United States. How will Lubbock, Inc., be affected if Brazil- currency (the real) strengthens over time?



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