Should the company pursue international sales further

Assignment Help Finance Basics
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

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial research report

Financial Research Report

  Calculate the return on invested capital for each firm

Calculate the return on invested capital (ROIC) for each firm. (Round your answers to two decimal places.)

  Calculation of after tax return

The Omega Company has some excess cash that it would like to invest in marketable securities for a long-term hold. Its vice-president of finance is planning three investments

  Compute today stock worth

Beaksley, Corporation is a very cyclical type of business which is reflected in its dividend policy. The firm pays a $2 per share dividend every other year. Last dividend was paid last year.

  What was your real rate of return for the period

You earned 26.3 percent on your investments for a time period when the risk-free rate was 3.8 percent and the inflation rate was 3.1 percent. What was your real rate of return for the period?

  What is its coefficient of variation

A stock has an expected return of 0.13 and a variance of 0.20. What is Its coefficient of variation?

  Pick out the projects that the firm should accept

If projects D and E are mutually exclusive, how would that affect your overall answer? That is, which projects would you accept in spending $60,000?

  What amount must you deposit each year

You want to have $25,000 in your savings account eight years from now, and you're prepared to make equal annual deposits into the account at the end of each year. If the account pays 4.75 percent interest, what amount must you deposit each year?

  Explain the term bond valuation

Explain the term Bond valuation and What is the annual interest payment on the second issue

  Use of mm''s proposition

Use MM's proposition 2 to calculate the new cost of equity.

  What is the shareholders equity

Culligan, Inc., has current assets of $26,293, net fixed assets of $128,720, current liabilities of $17,380, and long-term debt of $52,242.

  Capital structure and growth plans

Sustainable growth. A firm has decided that its optimal capital structure is 100 percent equity financed. It perceives its optimal dividend policy to be a 40 percent payout ratio.

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