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(6 points) Big Box Corporation, based in Kansas City, does business in Canada and Mexico. Big Box has net inflows of 100 million Mexican pesos
(6 points) Big Box Corporation, based in Kansas City, does business in Canada and Mexico. Big Box has net inflows of 100 million Mexican pesos and net outflows of 100 million Canadian dollars. The present exchange rate of the Mexican peso is approximately $.05 and the present exchange rate of the Canadian dollar about is $.85. Big Box has not hedged these positions. Will Big Box will be favorably or adversely affected if the dollar weakens against these currencies over time. Briefly explain.
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