Which firm is more likely to benefit from economies of scale

Assignment Help Financial Management
Reference no: EM131315785

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 subsidiaries in various countries. Which firm is more likely to benefit from economies of scale?

Reference no: EM131315785

Questions Cloud

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 ..
Using lagging strategy to reduce transaction exposure : Under what conditions would Zona Co.’s subsidiary consider using a “leading” strategy to reduce transaction exposure? Under what conditions would Zona Co.’s subsidiary consider using a “lagging” strategy to reduce transaction exposure?

Reviews

Write a Review

Financial Management Questions & Answers

  Stock have the same expiration date and strike prices

Three put options on a stock have the same expiration date and strike prices of $55, $60, and $65. The market prices are $3, $5, and $8, respectively. Explain how a butterfly spread can be created. Construct a table showing the profit from the strate..

  Values for single cash flow

Find the following values for a single cash flow:

  Developing product-identify potential gaps in product line

Developing a Product-Positioning Map for McDonald's Purpose Organizations continually monitor how their products and services are positioned relative to competitors. This information is especially useful for marketing managers but is also used by oth..

  Complete the assets of the pro forma balance sheet

Provincial imports has assembled 2015 financial statement income and balance sheet and financial projections for use in preparing financial plans for the coming year 2016. Prepare a pro forma for year ended December 31 2016 using fixed cost data to i..

  Take for the couple to triple their salary in real dollars

A couple will retire in 50 years; they plan to spend about $30,000 a year in retirement, which should last about 25 years. They believe that they can earn 8% nominal interest on retirement savings, and the couple realizes that the annual inflation ra..

  The nudge improving financial decisions

The nudge "Improving Financial Decisions", present your proposal.  discuss the limits and potential spillovers effect associated to your proposed nudge.

  Monthly mortgage payment

Your monthly mortgage payment (principal plus interest) is $1200. If you have a 30-year loan with a fixed interest rate of 0.5% per month, how much did you borrow from the bank to purchase your house?

  Residual dividend model-what will be its payout ratio

Welch Company is considering three independent projects, each of which requires a $5 million investment. The estimated internal rate of return (IRR) and cost of capital for these projects is presented below: If Welch establishes its dividends from th..

  Compute the percentages for all items

Total revenue is always 100 percent. Be sure to use the formula function in Microsoft Excel to show the formulas for each of the percentage you compute.

  What is the smallest expected gain over the next year

A stock has an annual return of 10.4 percent and a standard deviation of 41 percent. What is the smallest expected gain over the next year with a probability of 1 percent?

  Numerous performing artists-periodic inventory system

Dunbar Distribution markets CDs of numerous performing artists. At the beginning of March, Dunbar had in beginning inventory 3,723 CDs with a unit cost of $10. During March, Dunbar made the following purchases of CDs. March 5 2,978 @ $12 March 21 7,4..

  Using the step-down method to allocate costs

St. Payne Med Center is using the step-down method to allocate costs. They have two support departments (Record Keeping and Cleaning), and two patient service departments (Eye Care and Dental Care). Some of the Record Keeping costs are allocated to C..

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