Question
Recent outbreaks of respiratory infection-based pandemic diseases such as COVID19 and H1N1 have boosted the demand for N95 respirators among frontline healthcare workers . 3M
Recent outbreaks of respiratory infection-based pandemic diseases such as COVID19 and H1N1 have boosted the demand for N95 respirators among frontline healthcare workers . 3M Co. (a U.S. firm world's largest manufacturers for surgical masks) has an arrangement with a Chinese company in which it purchases products from them every week at the prevailing spot rate, and then sells the products in the United States invoiced in dollars. All of its competition is from U.S. firms that have no international business. The prices charged by 3M and its competitors will not change over the next year. Will the net cash flows generated by 3M increase, decrease, or be unaffected if the Chinese Yuan depreciates over the next year? Briefly explain.
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