The setup of business development in central

Assignment Help Business Management
Reference no: EM13295919

One area in which you are assisting is in the setup of business development in Central and South America for Navigation Systems, Inc. (NSI). The firm has negotiated the framework of supplying $40 million per year (in U.S. dollars) in navigations systems for Auxiliary Aircraft in Brazil for 10 years. If the products are manufactured in the United States and delivered to Brazil, then there will be a 5% import tariff on $40 million in product. As an alternative, the Brazilian government has offered to pay for all costs associated with building and locating a manufacturing plant in Brazil to build the product. Auxiliary Aircraft would pay an additional 15%, making annual sales $46 million (in U.S. dollars), and no tariff would be levied.

Answer the following questions about this situation:

Does any currency exchange rate risk exist? Why?

What is a tariff? How is it implemented and collected?

Also respond to the vice president of business development's request for the following:

the total amount of money NSI would receive from each scenario?

a report on what effect the Free Trade Agreement of the Americas (FTAA) or the possible regional integration, like Mercosur, would have on each scenario?

your thoughts about any other factors that would affect either scenario?

2- Navigation Systems Inc. now has total worldwide revenues of over $500 million forecast for this coming year. You have operations in the United States of $300 million with a 10% ROS (return on sales, which is the same as net income on an income statement); operations in Germany of €100 million with an ROS of 12%; and operations in Shanghai, China of 650 million Yuan with an ROS of 8%. You expect to repatriate all the ROS to the United States when available in 12 months.

At your supervisor's request, do the following:

Determine the spot and 12-month forward exchange rates, and determine any change in the ROS repatriated in 12 months based on exchange rates versus the current forecast.

Describe the repatriation using each of the following:
a spot transaction

an outright forward

a foreign-exchange swap

Would there be any use or benefit in using a currency option or currency swaption? Describe each.

Be sure to consider any U.S. corporate taxes that may be due and also whether there are any tax holidays in effect that may alter the taxes due on repatriation of the profits.

How would you advise the company to handle the repatriation?

Reference no: EM13295919

Questions Cloud

The various relationships and interdependencies : 1. Using a systems approach, identify the system or systems and their subsystems as well as the various relationships and interdependencies you see. You may utilize a drawing such as a sociogram if you like.
Explain the concentration of the sodium thiosulfate solution : A 50.00 mL sample of the solution (1L of 0.01000M solution requires 2.14g of potassium iodate), mixed with 2 g of potassium iodide and 10.00 mL of (H_{2}SO_{4}), is fully titrated with 38.50 mL of sodium thiosulfate. What is the concentration of th..
How long should she run in order to retrieve the treasure : A contestant on "Survivor" is challenged to find buried treasure in a featureless desert. For how long should she run in order to retrieve the treasure
What is the horizontal speed of the boat : You gather up your things and quickly flee the hotel. As you make your way through the crowded streets you are forced to conclude that Miquel is supplying information to your would be killers, what is the horizontal speed of the boat after you jump..
The setup of business development in central : One area in which you are assisting is in the setup of business development in Central and South America for Navigation Systems, Inc. (NSI). The firm has negotiated the framework of supplying $40 million per year (in U.S. dollars) in navigatio..
Explain the relative reaction times with ethanolic agno3 : Predict the relative reaction times with ethanolic AgNO3 for the following compounds and rank them from fastest to slowest: 2-chloro-2-butene, 1-chloro-2-butene, 2-chlorobutane.
President constitutional authority in the lawmaking process : Which of the below gives the President constitutional authority in the lawmaking process?
What is the approximate standard deviation of investment : Assume a project that has the following returns for years 1 to 5: 15%, 4%, -13%, 34%, and 17%. What is the approximate standard deviation of this investment?
What is the space modulation factor for the two components : A total sideband component of 25 volts amplitude is combinedin space with a carrier component of 100 volts. What is the space modulation factor(s) when 30 degrees of misphasing exists be when the two components

Reviews

Write a Review

Business Management Questions & Answers

  Explain market failure

Question- On Market Failure - We thought that the rationale for public policy is either market failure or government failure. Address the subsequent with this rationale in mind

  Explain case venice family clinic

Explain Case Venice Family Clinic and Start with process flow charts for new and returning patients and pharmacy customers

  Need for job evaluation

Objective is to ensure that each and every department in the organization is running in the most cost effective efficient manner. Running efficiently is no more criteria for its existence. It must prove financially justifiable also

  Express regulations of the organization when he attempted

His employer resisted on grounds that Jim had been negligent also had also violated the express regulations of the organization when he attempted to weld a gasoline tank. Which statement is correct?

  Describe how if a project manager expects a team to exercise

Describe how if a project manager expects a team to exercise their own judgment and the project manager must provide the team with decision making experience.

  Illustrate what is your assessment of long-term attraction

Illustrate what is your assessment of the long-term attractiveness of the industries represented in Sara Lee's trade portfolio?

  Differentiating communication of today and ten years ago

This can be as simple as how you communicate today (cell phone, email, text, twitter, etc.) versus how you communicated ten years ago (telephone, pager, fax, etc.).

  Discussion on literature in business

Do the works you are examining address change implicitly or explicitly and which way is more effective for addressing change for a business audience, and explain your answer?

  Differentiating in a case analysis

determine whether assumptions are useful or faulty, and distinguish between a good and bad information.

  Explain change control management

What can happen if an organization does not have an established change control management process? As a project manager, how would you ensure control management is accomplished?

  Explain compensation and labor strategy

Compensation & Labor Strategy, Describe your company's work force compensation/ training strategy. How did these strategies fit within the overall strategy

  Compute what net profit should anthony expect to earn

Assume that a market survey indicates that Anthony's proposed business is likely to generate only $190,000 in sales. What net profit should Anthony expect to earn?

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