Problem
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 for $80 million. The current spot rate on the Brazilian real (R$) is R$3.39. Based on your analysis, discuss possible options Embraer can adopt to deal with this risk. Identify all options Embraer could consider in mitigating this risk.