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Exposure to interest rate or currency movements can add to the volatility of free cash flow. Would that add or subtract from the value of

  1. Exposure to interest rate or currency movements can add to the volatility of free cash flow. Would that add or subtract from the value of a firm? Why? If an increase in interest rates would be costly, how might management reduce that risk? If a rise in the value of the euro over the next six months would eliminate any profits from importing French wine, what might a U.S. wine importer do to avoid those losses?

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