Sycamore (A U

question 22

Multiple Choice

Sycamore (a U.S. firm) has no subsidiaries and presently has sales to Mexican customers amounting to MXP98 million, while its peso-denominated expenses amount to MXP41 million. If it shifts its material orders from its Mexican suppliers to U.S. suppliers, it could reduce peso-denominated expenses by MXP12 million and increase dollar-denominated expenses by $800,000. This strategy would ____ the Sycamore's exposure to changes in the peso's movements against the U.S. dollar. Regardless of whether the firm shifts expenses, it is likely to perform better when the peso is valued ____ relative to the dollar.

• A) reduce; high
• B) reduce; low
• C) increase; low
• D) increase; high

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Definitions:

Graphic Highlighting

The use of visual elements such as bold colors, shapes, or lines to draw attention to specific parts of a text or image.

Multiple Topics

Covering or involving various subjects or themes, especially within a conversation or a single piece of writing.

Voice Mail Communication

The exchange of spoken messages through a digital voicemail system, allowing individuals to leave and retrieve messages.

Cellphone Communication

The process of exchanging information between individuals through the use of mobile phones.