Eight-Mile Electric Motor Co. (EMEM) manufactures electric motors for electric and hybrid cars in their plant in Detroit, Michigan, USA.One of EMEM's biggest markets is in Europe.EMEM competes with a French producer of electric motors, Citreonic Electric Motor Co.On January 1, 2019, the exchange rate was $1.2050/.On January 1, 2020 the exchange rate was $1.2150/.The US experienced a 6.5% inflation rate over that time period.France's inflation was 2.0%.Assume that EMEM's manufacturing costs increased at the rate of US inflation.Assume that Citreonic's costs increased at the rate of French inflation.

Did one company gain an advantage over their competitor due to the change in exchange rates during 2019?Please show all calculations needed to come to your conclusion.