1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
konstantin123 [22]
3 years ago
6

A U.S. automobile company sells many of its cars in countries that have lower taxes on corporate profits than the U.S. Why might

it be profitable for the automobile company to vertically integrate into the car-retailing business in such countries, rather than contracting with independent car dealers?
Business
1 answer:
stira [4]3 years ago
4 0

Answer:

It will be more profitable to vertically integrate because the company will be able to further reduce its costs.

Explanation:

Profit = Sales - Cost

The lower the cost, the higher the profit (if sales remains the same).

A Vertical integration strategy requires a company to <u>own or control its suppliers (backward integration) or its distributors or retailers (forward integration)</u>, and therefore, gain more control over its value chain.

<em>If the U.S. automobile company chooses to vertically integrate into the car retailing business in countries where it sells most of its cars, then it would cut out certain costs, such as the cost of contracting with independent car dealers, which would further improve profitability.</em>

Also, such forward integration into retailing means the company will develop processes along its value chain that will increase the efficiency of its operations.

You might be interested in
E-eyes.com has a new issue of preferred stock it calls 20/20 preferred. the stock will pay a $20 dividend per year, but the firs
Sophie [7]

The price of the stock 19 years from now would be the present value of all the dividends to be paid starting year 20. Here, to compute the PV of the dividends, we can use the PV of perpetuity formula as the dividends will be paid for the infinite period of time.

Value of the stock after 19 years = Dividend year 20/ required return

= $20 / 0.0725

= $275.86

7 0
2 years ago
Which of the following statements about globalization is NOT true?
PtichkaEL [24]
A globalization change in a relationship affecting a government
8 0
3 years ago
The publishing conglomerate Conde Nast is able to purchase mailing lists of people who have bridal interests, knowing that its M
katovenus [111]

Answer:

e. identifiable

Explanation:

Something is identifiable when is easy to recognize, in the excercise given the publishing conglomerate Conde Nast aims to this identifiable segments in order to reach certain customers.

I hope you find this information useful and interesting! Good luck!

6 0
3 years ago
You are considering the purchase of a home that would require a mortgage of $150,000. How much more in total interest will you p
Irina18 [472]

Answer:

$111,991.59

Explanation:

using a loan calculator, I found the following information:

principal $150,000

apr 5.65%

360 monthly payments of $865.85

total payments $311,707.33

total interest charged on the loan $161,707.33

principal $150,000

apr 4%

180 monthly payments of $1,109.53

total payments $199,715.74

total interest charged on the loan $49,715.74

if you choose the 30 year mortgage, you will pay $161,707.33 - $49,715.74  = $111,991.59

3 0
2 years ago
What kind of applications can improve the quality of your blog ?
RSB [31]
The answer for the question is the letter B) advanced graphics
7 0
2 years ago
Read 2 more answers
Other questions:
  • On average hotel guests who take elevators weigh about 150 pounds
    10·1 answer
  • Union Local School District has bonds outstanding with a coupon rate of 3.1 percent paid semiannually and 22 years to maturity.
    13·1 answer
  • The following information is available for Blossom Company:
    8·1 answer
  • A stock is expected to pay the following dividends per share over the next four​ years, respectively: ​ $0.00, $2.30,​ 2.60, and
    13·1 answer
  • Select the correct answer.
    7·1 answer
  • To increase sales of its low-fat pizzas in its established market, Dietizza is offering discounts on all its pizzas. According t
    12·1 answer
  • 2. Fiscal policy Suppose a hypothetical economy is currently in a situation of deficient aggregate demand of $32 billion. Four e
    11·1 answer
  • The following labor standards have been established for a particular product:
    5·1 answer
  • Each visor requires a total of $4.00 in direct materials that includes an adjustable closure that the company purchases from a s
    10·1 answer
  • Advances in technology like the creation of cheap, lightweight laptops has allowed workers to work from almost anywhere. Please
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!