foreign project in Hungary and another in Japan had the same perceived value from the U.S. parent's perspective. Then, the excha
nge rate expectations were revised, downward for the value of the Hungarian forint and upward for the Japanese yen. The break-even salvage value for the project in Japan would now be ____ from the parent's perspective.
The correct answer is higher than that for the Hungarian project.
Explanation:
The break-even point is defined as that point or level of sales in which the total income is equal to the total costs and, therefore, no accounting profit or loss is generated in the operation. It is a mechanism for determining the point at which sales will exactly cover total costs. The breakeven point is also known as the Cost-Volume-Profit ratio, and emphasizes the different factors that affect profit. The break-even point allows determining the minimum number of units that must be sold or the minimum value of sales to operate without losses. The analysis of the break-even point answers the question related to the decisions that must be made about the planning of the profits of a company or an investment project. In this regard, it is convenient to say that the study of any investment project must include the calculation of the sales levels (either in units or in pesos) that are required for reach operational balance.
In the perfect competition structure producers have no power to change prices, as goods are homogeneous. Thus, since products are the same, if the producer raises the price, consumers will consume with other sellers.
Foreign Direct Investment is a type of investment into a country where the foreign investor establishes a presence by actually running and operating a company in the domestic country.
This is what the large theme park wants to do in Pantay. By making a commitment and hiring hundreds of locals, the company is intent on running a company on the island so this is Foreign Direct Investment.
<span>The tax rate of $.0815 in decimal can be expressed as 81.5 mills. </span>one mill is one thousandth of a currency unit, or 0.001$. So 0.0815 in mills means we have to divide 0.0815 by 0.001 0.0815/0.001 = 81.5
