The facility later because the cost advantage dissipates

Assignment Help Financial Management
Reference no: EM131315786

Some MNCs establish a manufacturing facility where there is a relatively low cost of labor, but they sometimes close the facility later because the cost advantage dissipates. Why do you think the relative cost advantage of these countries is reduced over time? (Ignore possible exchange rate effects.)

Reference no: EM131315786

Questions Cloud

Premium bond making semiannual payments : Bond X is a premium bond making semiannual payments. The bond pays a 7 percent coupon, has a YTM of 5 percent, and has 19 years to maturity. Bond Y is a discount bond making semiannual payments. What is the price of each bond today?
What is the present value of the payments : Suppose you are going to receive $10,000 per year for five years. The appropriate interest rate is 10 percent. What is the present value of the payments if they are in the form of an ordinary annuity? Suppose you plan to invest the payments for five ..
What are the potential benefits for this firm : Starter Corp. of New Haven, Connecticut, produces sportswear that is licensed by professional sports teams. It recently decided to expand in Europe. What are the potential benefits for this firm from using DFI?
Economies continue to be independent of other economies : Offer your opinion on why economies of some less developed countries with strict restrictions on international trade and DFI are somewhat independent from economies of other countries. Why would MNCs desire to enter such countries? If these countries..
The facility later because the cost advantage dissipates : Some MNCs establish a manufacturing facility where there is a relatively low cost of labor, but they sometimes close the facility later because the cost advantage dissipates. Why do you think the relative cost advantage of these countries is reduced ..
Which firm is more likely to benefit from economies of scale : Bear Co. and Viking, Inc., are automobile manufacturers that desire to benefit from economies of scale. Bear Co. has decided to establish distributorship subsidiaries in various countries, while Viking, Inc., has decided to establish manufac­turing s..
Explain some limitations when it hedges translation exposure : Bartunek Co. is a U.S.-based MNC that has European subsidiaries and wants to hedge its translation exposure to fluctuations in the euro’s value. Explain some limitations when it hedges translation exposure.
Economic exposure to exchange rate fluctuations : UVA Co. is a U.S.-based MNC that obtains 40 percent of its foreign supplies from Thailand. It also borrows Thailand’s currency (the baht) from Thai banks and converts the baht to dollars to support U.S. operations. Explain how UVA Co. can reduce its ..
Economic exposure to exchange rate fluctuations in the euro : Baltimore, Inc., is a U.S.-based MNC that obtains 10 percent of its supplies from European manufacturers. Sixty percent of its revenues are due to exports to Europe, where its product is invoiced in euros. Explain how Baltimore can attempt to reduce ..

Reviews

Write a Review

 

Financial Management Questions & Answers

  The great depression that began in the usa in 1929 saw a

the great depression that began in the usa in 1929 saw a collapse in the financial markets with significant economic

  Calculate the present value of the capital portion

The fair rate of return on similar debentures is 14% before tax. Calculate the present value of the capital portion of the debenture.

  What is the macaulay duration of the security

What is the Macaulay duration of the following security?

  Labor markets to achieve and stay at full employment

Assume in parts (a)-(c) that the Fed has decided that a slow rise in the Federal funds rate is likely the correct approach to balancing risks of holding inflation to around 2% per year while maintaining enough growth in GDP and labor markets to achie..

  What is the total cost of using the grader today

A 5 meter blade width grader with 300 HP cost $1 million and has an operating life of 35,000 hrs. Total operating cost for using this grader is $100 per hours. The grader will operate 5,000 hours per year. The interest rate is assumed at 10% . Constr..

  A zero coupon bond has a yield to maturity

A zero coupon bond has a yield to maturity of 7.48 percent, semiannual compounding, a $1,000 face value, and a market price of $386.48. How many years is it until this bond matures?

  The impact be on the dynamic aggregate demand curve

Suppose there were a wave of investor pessimism in the economy. - What would the impact be on the dynamic aggregate demand curve?

  Companys shares on best efforts basis

Goode Investment Bank agrees to underwrite 1,000,000 CFS Company’s shares on a best efforts basis. It then sells 800,000 shares to the public for $20 each. The agreement is that Goode will charge 1.50 per share sold. How much money does CFS receive? ..

  Difference in face value-current market price of securities

Currently, yields to maturity on 1 year and 2 year us treasury securites are .602% and .852%. You can assume that for simplification purposes there are no coupon payments on these bonds and the yield to maturity is entirely due to the difference in f..

  Indian investor indian bonds are risk-free

Why would an investor in India be willing to buy a US bond that pays 0.25% coupon when he can buy an Indian bond that pays 8% coupon? Do note that for an Indian investor Indian bonds are risk-free. The Indian investor does not have any payable or deb..

  The focus of this case is on financial strategy

Our case this semester will be Radnet, Inc.: An Acquisition. You will find the case in your coursepack that you purchased from Harvard at the beginning of this semester. The focus of this case is on financial strategy.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd