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

  What is annualized return on this investment

Suppose you buy stock at a price of $83 per share. Three months later, you sell it for $89. You also received a dividend of $.38 per share. What is your annualized return on this investment?

  The relationship between implied volatility and strike price

Use DerivaGem to calculate the relationship between implied volatility and strike price for 6-month European options on the company today.

  What determines stocks fundamental value

What determines a stock's fundamental value? How has the Federal Reserve System affected the value of stock? Explain.

  What is the equivalent after tax yield

A taxable corporate issue yields 7 percent. For an investor in a 35 percent tax bracket, what is the equivalent aftertax yield?

  Two different industries and compare their capital structure

What are some practical limitations for a company in trying to maximize the amount of leverage (debt) used in the capital structure? Choose two companies in two different industries and compare their capital structure? Is there anything about the par..

  Considering the purchase of new plastic stamping machine

Big Steve's, makers of swizzle sticks, is considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of $105,000 and will generate net cash inflows of $20,000 per year for 9 years. What is the projects inte..

  Relationship between assets-liabilities plus owners equity

Which one of the following financial statements shows a relationship between assets and liabilities plus owners’ equity?

  What is the break even in units dollars for each seminar

A seminar series has set up costs of $3,000; a rent per event of $1,000; plus a variable cost of $30 per attendee for food, supplies, and refreshments. The price of the seminar admission is $100 per person. What is the break even in a) units {people}..

  Gain was rustin subject to at date stock was distributed

Rustin recently retired from Fox, Inc., a national plastics supplier. When Rustin retired his stock bonus plan had 10,000 shares of Fox, Inc. stock. Fox, Inc. took deductions equal to $20 per share for the contributions made on Rustin's behalf. How m..

  What price would you estimate for stock

Halliford Corporation expects to have earnings this coming year of $2.63 per share. Halliford plans to retain all of its earnings for the next two years. For the subsequent two years, the firm will retain 49% of its earnings. It will then retain 23% ..

  Effective annual rate and annual percentage rate

The problem illustrates a deceptive way of quoting interest rates called add-on interest. Imagine that you see an advertisement for Crazy Judy’s Stereo City that reads something like this: “$1000 Instant Credit! 16.5% Simple Interest!  What is the AP..

  What is the effect on the us production possibility curve

Show graphically and explain the effect on quantities produced, quantities consumed, and well-being in the rest of the world. -  Explain as precisely as possible why well-being changes in the rest of the world.

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