Question: Asheville Co . has a subsidiary in Mexico that develops software for its parent. It rents a large facility in Mexico and hires many people
Asheville Co has a subsidiary in Mexico that develops software for its parent. It rents a large facility in Mexico and hires many people in Mexico to work in the facility. Asheville Co has no other international business. All operations are presently funded by Asheville's parent. All the software is sold to US firms by Asheville's parent and invoiced in US dollars. a If the Mexican peso depreciates against the dollar, does this have a favorable effect, unfavorable effect, or no effect on Asheville's value? Depreciation of the peso has effect because it results in dollar expenses to Asheville Co b Asheville Co plans to borrow funds to support its expansion in the United States. The Mexican interest rates are
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