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Longhorn purchases its materials in the Phillipines.

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Longhorn a company based in Mexico but purchases its materials in the Philippines. If the peso strengthens what effect will this have in terms of economic exposure? Will they be at a competitive disadvantage or advantage and why?

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Solution Summary

This solution discusses what happens when the peso strengthens, and what effect this will have in terms of economic exposure. I also discuss if Longhorn will be at a competitive disadvantage or advantage.

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If the Peso strengthens, it will basically cost Longhorn more to pay for their materials. The economic exposure will be based on the fact that the Peso has ...

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