Should the company pursue international sales further

Reference no: EM13297755

Larissa Warren, the owner of East Coast Yachts, has been in discussions with a yacht dealer in Monaco about selling the company's yachts in Europe. Jarek Jachowicz, the dealer, wants to add East Coast Yacht's to his current retail line. Jarek has told Larissa that he feels the retail sales will be approximately 5 Million euros per month. All sales will be made in Euros, and Jarek will retain 5% of the retail sales as commission, which will be paid in euros. Since the yachts will be customized to order, the first sales will take place in one month. Jarek will pay East Coast Yachts for the order 90 after it is filled. This payment schedule will continue for the length of the contract between the two companies. Larissa is confident the company can handle the extra volume with its existing facilities, but she is unsure about any potential financial risk of selling its yachts in Europe. In her discussion with Jarek, she found the current exchange rate is $.73/euro. At the exchange rate, the company would spend 70% of the sales income on production cost. This number does not reflect the sales commission to be paid to Jarek. Taking all factors into account, should the company pursue international sales further? Why or Why not?

Reference no: EM13297755

Questions Cloud

What are the different ways the financial system have dealt : What are the different ways the financial system have dealt with the residentail mortagages being difficult for the financial system to handle?

Why is the residential mortgage a difficult loan : why is the residential mortgage a difficult loan for the financial system to handle?

How many coulombs of charge are enclosed by the box : The total electric flux coming out of a cubical box, that is 28.0 cm on a side, is 94 GNm^2/C, How many coulombs of charge are enclosed by the box

Determine probabilities of different events of flood wall : A temporary flood wall has been constructed to protect several homes in the floodplain. the wall was built to withstand any discharge up to the 20-year period after all the homes have been relocated.

Should the company pursue international sales further : This number does not reflect the sales commission to be paid to Jarek. Taking all factors into account, should the company pursue international sales further? Why or Why not?

What distance will the electron travel before it stop : consider an electron with an initial speed v0 = 32 Mm/s (1 Mm = 1 megameter = 1000 km = 1E6 m), What distance d (in m) will the electron travel before it stops

Why is the residential mortgage a difficult loan : Why is the residential mortgage a difficult loan for the financial system to handle? What are the different ways the financial system have dealt with it?

How much should be accumulated by the beginning : Approximately how much should be accumulated by the beginning of retirement to provide a $3,700 monthly check that will last for 25 years, during which time the fund will earn 8% interest with monthly compounding?

Determine the magnitude of the net force on the star : Four stars with equal masses m=1.99×1030 kg are located at the corners of a square, What is the magnitude of the net force on the star at the origin

User Account

All Pages