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Description: Iceland’s McDonald’s Corp. restaurants will be closed at the end of the month after the collapse of the krona eroded profits at the fast-food chain, McDonald’s franchise holder Lyst ehf said.

Source: Bloomberg.com

Date: 10/26/2009

Link: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aNNKbYNHF_Og

Questions for discussion: 

  • Explain why businesses that are dependent on imported materials are at greater financial risk during a currency crises?
  • What alternatives are available to management besides closing down operations?

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