60.1K

Verified Solution

Link Copied!

Assume you have decided to build one plant in each country to serve the local market and to export as needed. Answer the following questions. For any information not presented, use your own logical assumptions. You do not have to research facts elsewhere. 1. Pick any country and determine the currency risk. You only need to pick one country but consider both a weakening and strengthening of the local currency against the currencies of the other two countries. 2. Pick a plant in a different country than part A. Choose one of the following scenarios and describe the implications for that country's plant, including changes in the returns. Describe how you might adjust your business model if you expected these changes to remain for several years. Choose only one of the following scenarios: A. To protect its local supply of batteries, China has imposed a 100% tariff on exported batteries. Therefore, the cost of batteries sold outside of China is twice what it was. B. The U.S. has imposed 50% tariffs on all imported electric vehicles, replacing the tariffs it had in place prior. C. The Brazilian Economic Miracle took hold. Inflation is now forecasted at 2% per year while inflation in the US is seen as 3% per year. Chinese inflation expectations remain at 5% per year. The Brazilian Real is now at R2.5 : $1. Assume you have decided to build one plant in each country to serve the local market and to export as needed. Answer the following questions. For any information not presented, use your own logical assumptions. You do not have to research facts elsewhere. 1. Pick any country and determine the currency risk. You only need to pick one country but consider both a weakening and strengthening of the local currency against the currencies of the other two countries. 2. Pick a plant in a different country than part A. Choose one of the following scenarios and describe the implications for that country's plant, including changes in the returns. Describe how you might adjust your business model if you expected these changes to remain for several years. Choose only one of the following scenarios: A. To protect its local supply of batteries, China has imposed a 100% tariff on exported batteries. Therefore, the cost of batteries sold outside of China is twice what it was. B. The U.S. has imposed 50% tariffs on all imported electric vehicles, replacing the tariffs it had in place prior. C. The Brazilian Economic Miracle took hold. Inflation is now forecasted at 2% per year while inflation in the US is seen as 3% per year. Chinese inflation expectations remain at 5% per year. The Brazilian Real is now at R2.5 : $1

Answer & Explanation Solved by verified expert

See Answer