Assume that you live in the UK and invest GBP 100,000 to establish a language school in So Paulo City, Brazil. You set up a small subsidiary in Brazil with an office and an attached classroom that you lease. You hire local individuals in Brazil who can speak English and teach it to others. Your school offers two types of courses: a 1-month structured course in English and a 1-week intensive course for individuals who already know English but want to improve their skills before visiting the UK. You advertise both types of teaching services in local newspapers. All revenue and expenses associated with your business are denominated in Brazilian Real. Your subsidiary sends most of the profits from the business in Brazil to you at the end of each month. Although your expenses are stable, your revenue varies with the number of clients who sign up for the courses in Brazil.

Under this situation, what is your recommendation about the appropriate financial tools that could be applied by management to minimize the negative effect of Brazilian Real depreciation? How the activities of your business can be related to the balance of payments between UK and Brazil?