Problem: You own an electronics company in the US, and you also have a components manufacturing facility in Mexico that you finance with funds from the US. Your assembly operations and headquarters are in the US. You hear that the Mexican peso is expected to depreciate by 25% against the dollar on the foreign exchange market within the next year. Considering the indicators and information discussed in the module, the textbook, and that you find in your research.
- Analyze this situation by using indicators learned in class.
- Evaluate how this change might impact your business.
- Recommend measures that can be taken to avoid losses.