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Trak Co. (of the United States) presently serves as a distributor of products by purchasing them from other U.S. firms and selling them in Japan.

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Trak Co. (of the United States) presently serves as a distributor of products by purchasing them from other U.S. firms and selling them in Japan. It wants to purchase a manufacturer in India that could produce similar products at a low cost (due to low labor costs in india) and export the products to lapan. The operating expenses would be denominated in indian rupees. The products would be invoiced in Japanese yen. If Trak co. can acquire a manufacturer, it will discontinue its existing distributor business. If the yen is expected to appreciate against the dollar and the rupee is expected to depreciate against the dollar, how would this affect Trak's direct forelgn investment? Trak Co. benefit if the rupee depreciates over time because it will need doliars to cover its operating expenses. It benefit from a stronger yen over time because the yen will convert into doliar cash flows

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