Exposure to fluctuations in the value of the euro

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Reference no: EM131911949

Washington Co. is a US-based firm that obtains 10% of its supplies from European manufacturers. 60% of its revenues are due to exports to Europe where its product is invoiced in euros.

a. Why would a reduction in the value of the euro be likely to reduce profit for Washington Co.?

b. Explain one way the company could reduce its exposure to fluctuations in the value of the euro.

Reference no: EM131911949

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