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12. Exchange Rates and Foreign Investments - Investments in foreign countries are highly affected by changes in the exchange rate. Assume that the U.S. firm,
12. Exchange Rates and Foreign Investments - Investments in foreign countries are highly affected by changes in the exchange rate. Assume that the U.S. firm, Maneco Corp., has borrowed Japanese yen and used the proceeds for a U.S.-established project. Also, assume you are told that the Japanese yen has depreciated against the U.S. dollar during the borrowing period. Briefly discuss how these borrowing/investing strategies would affect the returns to the Maneco Corp.
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