Juwaher Aldossary, the finance director of Bedouin Comfort, has decided to export its Arabic furniture to India. Furthermore, due to the low cost of wood in Asia, Juwaher has decided to import some of the wood needed to manufacture the furniture from India. Juwaher feels that importing wood from India will provide Bedouin Comfort with a cost advantage (the wood imported from India is about 20 percent cheaper than wood in Saudi Arabia). Bedouin Comforts competitors for exotic high quality wooden furniture are investing their products in their local currency, however, Bedouin Comfort has decided to invoice its products in Indian rupee. Juwaher Aldossary felt that this strategy would give Bedouin Comfort a competitive advantage, since Indian importers can plan more easily when they do not have to worry about paying differing amounts due to currency fluctuations. Furthermore, Bedouin Comforts' primary customer in India (a large furniture chain) has committed itself to purchasing a certain amount of Arabic furniture annually if Bedouin Comfort will invoice in Indian rupee for a period of three years. Bedouin Comforts purchases of wood from Indian exporters are currently invoiced in Indian rupee. As Bedouin Comforts' financial analyst, you have some doubts about the company's plans. Although you believe Bedouin Comforts' strategy for its Indian sales and imports is sound, you are concerned about current expectations for the Indian economy. Current forecasts indicate a high level of anticipated inflation, a decreasing level of national income, and a continued depreciation of the Indian rupee. Consequently, you have developed a list of questions for yourself, which you plan to present to the company's CFO after you have answered them. Your questions are listed here: 1. How could a higher level of inflation in India affect Bedouin Comfort (assume Saudi inflation remains 2. How could a decreasing level of national income in India affect Bedouin Comfort? 3. How could a continued depreciation of the Indian rupee affect Bedouin Comfort? How would it affect Bedouin Comfort relative to other exporters invoicing their furniture in their local currency? (Assume that the inflation in your competitor's countries also stays constant) I