Question: a) Explain how purchasing power parity determines the exchange rate between two currencies. b) How can a changing exchange rate impact a company's profits on

a) Explain how purchasing power parity determines the exchange rate between two currencies.

b) How can a changing exchange rate impact a company's profits on one of its foreign operations?

c) Is it better to calculate the net present value of a foreign project in the foreign currency or in the domestic currency?

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