Discussion Post
• Transaction versus Economic Exposure Compare and contrast transaction exposure and eco- nomic exposure. Why would an MNC consider exam- ining only its "net" cash flows in each currency when assessing its transaction exposure?
• Transaction Exposure Fischer, Inc., exports products from Florida to Europe. It obtains supplies and borrows funds locally. How would appreciation of the euro likely affect its net cash flows? Why?
• Economic Exposure Longhorn Co. produces hospital equipment. Most of its revenues are in the United States. About half of its expenses require out- flows in Philippine pesos (to pay for Philippine mate- rials). Most of Longhorn's competition is from U.S. firms that have no international business at all. How will Longhorn Co. be affected if the peso strengthens?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.