Discuss embraer is exposed to foreign exchange rate risk

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Reference no: EM133333918

Assignment:

Embraer of Brazil is one of the two leading global manufacturers of regional jets (Bombardier of Canada is the other). Regional jets are smaller than the traditional civilian airliners produced by Airbus and Boeing, seating between 50 and 100 people on average. Embraer has concluded an agreement with a regional U.S. airline to produce and deliver four aircraft one year from now and will receive payment in US$ of $80 million. The current spot rate on the Brazilian real (R$) is R$3.39.

Discuss whether Embraer is exposed to foreign exchange rate risk.

Reference no: EM133333918

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