Ch 12: Answers to End of Chapter Questions

1. Reducing Economic Exposure.

ANSWER: Baltimore Inc. could reduce its economic exposure by shifting some of its U.S. expenses to Europe. This may involve shifting its sources of materials or even part of its production process to Europe. It could also reduce its European revenue but this is probably not desirable.

2. Reducing Economic Exposure.

ANSWER: UVA Company has periodic outflow payments in Thai baht that are substantially more than its Thai baht inflow payments. UVA could reduce its economic exposure by attempt¬ing to increase sales in Thailand, which would generate additional Thai baht inflows.

3. Reducing Economic Exposure.

ANSWER: Albany may ask the Australian government to provide payment in U.S. dollars. Alternatively, Albany could attempt to shift some of its expenses to Australia, by either purchasing Australian supplies or shifting part of the production process to Australia. These......

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Title: Loreal
Approximate Word Count: 2822
Approximate Pages: 12 (250 words per double-spaced page)

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