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3 years ago

Describe at least three risks a company might face if it participates in global trade.

Business

1 answer:

mihalych1998 [28]3 years ago

3 0

Answer:

Foreign exchange risk: Foreign exchange risk usually concerns accounts receivable and payable for contracts that are or soon will be in force. Foreign exchange rates are constantly in flux, so businesses can be forced to convert funds generated abroad at lower rates than they budgeted.

Credit risk: Credit or counterparty risk is the risk of not collecting an account receivable. There are ways businesses expanding to global markets can protect themselves against this risk

Intellectual property risk : Intellectual property risk is the risk that third parties may make unauthorized use of the business's strategic information (studies, research, agreements and contracts, client list, trade secrets, etc.) or property that directly or indirectly affects the value of the business's products or services (patents, designs, trademarks, know-how, etc.). When doing business internationally, these risks increase tenfold because of the difficulty of remotely defending the business's rights to this property.

Shipping risks: Whether shipping goods locally or abroad, you face risks such as breakage, loss, theft, vandalism, accident, seizure and contamination. Before you ship any goods, transfer responsibility for shipping to the buyer or seller and take out sufficient insurance. The International Chamber of Commerce's Incoterms set out each party's roles and responsibilities with regard to shipping risk. It is best to work with a forwarding agent.

Explanation:

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A company makes a single product that it sells for $16 per unit. Fixed costs are $76,800 per month and the product has a contrib

rosijanka [135]

Answer:

Margin of safety = 2,000 units

Explanation:

Margin of Safety =Total units sold-Break-even point

where Total units sold = $\frac{Actual Sales}{Selling price/unit}= \frac{224,000}{16}$ =14,000 units

Break even point = $\frac{Total Fixed Costs}{Contribution/unit}$

The contribution per unit can be deduced from the contribution margin ratio as follows:

Contribution margin ratio= $\frac{ContributionMargin}{Sales}$ =40%

this implies that Contribution Margin=40%*Sales

Given a selling price of $16/unit, contribution per unit = 0.4*$16=$6.40

therefore :

Break even point = $\frac{76,800}{6.40}$ =12,000 Units

Margin of Safety =Total units sold-Breakeven point= 14,000 units -12,000 units = 2,000 units

7 0

3 years ago

Match each type of tariff with an example of its use.

Anna35 [415]

a. revenue tariff----------------a 6% tariff on oranges to provide money for the government.

Revenue tariff alludes to a set of rates planned for expanding public revenue. It can likewise be said as a tax exacted on import and fare to fund-raise for the government. Revenue tariff is any schedule or arrangement of rates or changes that are proposed to create income for the government.

b. protective tariff---------a 50% tariff on oranges to shield domestic orange growers from international competition.

Protective tariffs are tariffs that are established with the point of ensuring a domestic industry. Tariffs are likewise forced keeping in mind the end goal to raise government income, or to decrease a bothersome action. In spite of the fact that a tariff can all the while secure household industry and procure government income, the objectives of assurance and income augmentation recommend distinctive duty rates, involving a trade off between the two points.

c. retaliatory tariff-----------a 200% tariff on oranges to reply to a high tariff imposed by another country.

Retaliatory tariff refers to a tariff imposed as a methods for constraining a foreign government and expected to urge the give of correspondence benefits.

Retaliatory tariff is a tariff imposed to pressure another nation into evacuating its own tariffs or making exchange concessions.

6 0

3 years ago

If Calibrated believes that orders will fall off by no more than 15% following a 10% price increase, should it go through with t

ra1l [238]

Answer:

should it hold the price constant and meet all the excess demand with an increase in production

Explanation:

to determine if the firm should increase their price or not, we have to determine the elasticity of demand.

Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.

Price elasticity of demand = percentage change in quantity demanded / percentage change in price

If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.

Demand is inelastic if a small change in price has little or no effect on quantity demanded. the absolute value of elasticity would be less than one

elasticity of demand = 15% / 10% = 1.5

Demand is elastic. if price is increased, the quantity demanded would fall more than the change in price and total revenue would fall.

7 0

3 years ago

Sandhill Electronics reported the following information at its annual meetings:

allsm [11]

Answer:

$6,663,453

Explanation:

Cash and marketable securities = $1,235,455

Inventory = $7,134,300

Accounts Receivables = $3,454,000

Other current assets = $121,455

Total Current Assets:

= Cash and marketable securities + Inventory + Accounts Receivables + Other current assets

= $1,235,455 + $7,134,300 + $3,454,000 + $121,455

= $11,945,210

Accounts payable = $4,159,357

Short term notes payable = $1,122,400

Total Current Liabilities:

= Accounts payable + Short term notes payable

= $4,159,357 + $1,122,400

= $5,281,757

Net Working Capital = Total Current Assets - Total Current Liabilities

= $11,945,210 - $5,281,757

= $6,663,453

8 0

4 years ago

A jeans maker is designing a new line of jeans called Slims. The jeans will sell for $205 per pair and cost $164 per pair in var

konstantin123 [22]

Answer:

Results are below.

Explanation:

Giving the following information:

The jeans will sell for $205 per pair and cost $164 per pair in variable costs to make.

The contribution margin per unit is calculated using the selling price per unit and the unitary variable cost:

Unitary contribution margin= 205 - 164= $41

Now, to calculate the contribution margin ratio, we need to use the following formula:

contribution margin ratio= contribution margin/selling price

contribution margin ratio= 41/205

contribution margin ratio= 0.2

3 0

3 years ago