exam 3 copy.docx - 1. The Government plays an important...

1. The Government plays an important role in facilitating or limiting the
operations of the business entity during the decision on an entry
strategy for an alliance. The following factors are:
2. A firm must decide whether to make a component part in-house or to
contract it out to an independent supplier. Manufacturing the part
requires a non-recoverable investment in specialized assets. The most
efficient suppliers are located in countries with currencies that many
foreign exchange analysts expect to appreciate substantially over the
next decade. What are the pros and cons of a) manufacturing the
component in-house; b) outsourcing manufacturing to an independent
supplier? Which option would you recommend? Why?
2. The easiest option would be to just wait for December, take the
400,000 yen and then convert it to the spot rate, which is supposed to
be $1=100. You'd have $4,000 in this case in the middle of December.

There is also a third option. You can take money back with the