2 Impact of a weak currency on feasibility of FDI.

Tilda AB, a Swedish producer of computer disks, plans to establish a subsidiary in the Ukraine in order to penetrate the Middle Eastern market. Tilda’s executives believe that the Ukrainian hryvnia’s value is relatively strong and will weaken against the Swedish Krone over time. If their expectations about the hryvnia’s value are correct, how will this affect the feasibility of the project? Explain.