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Author Question: EZ Lawn Currency Risk (Scenario)The EZ Lawn Corporation manufactures lawn equipment such as lawn ... (Read 730 times)

jwb375

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EZ Lawn Currency Risk (Scenario)
The EZ Lawn Corporation manufactures lawn equipment such as lawn mowers, blowers, and trimmers. The lawn equipment is assembled in the U.S. at a facility in Florida, but the firm outsources inputs from a number of countries, each with varying degrees of economic stability. Given the importance of the firm's sourcing activities, EZ Lawn managers are discussing methods that might reduce the currency risk faced by EZ Lawn.


Contracting with secondary suppliers outside the U.S. for critical input components would most likely enable EZ Lawn to ________.
◦ limit the amount of debt financing necessary for global expansion
◦ shift production from one country to another in case of currency fluctuations
◦ purchase components based on currency options instead of currency swaps
◦ hedge translation exposure by limiting the amount of interest payments


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Marked as best answer by jwb375 on Feb 15, 2021

pallen55

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