Blades Inc. Case

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Case: 1 BLADES, Inc. Case Question 1: How could a higher level of inflation in Thailand affects Blades (assume U.S. inflation remains constant)? Answer: Higher level of inflation in Thailand can affect Blades. Due to inflation in Thailand foreign goods will become cheap. Again inflation will increase in an increase of imports and at the same time exports will go down. As a result imports of rubber and plastic components from Thailand for Blades Inc. will suffer and it will increase their production cost. On the other hand due to inflation in Thailand customers will get products from Blades Inc. at a lower price relative to others, which will increase their (Blade Inc.) export to rise. Eventually their sales will increase. Question…show more content…
exporters invoicing their roller blades in U.S. dollars? Answer: A continued depreciation in baht may affect Blade Inc. in their export. Though Blade Inc. meet some of their expenses in Thai baht, but in case of currency conversion Blade inc. gets less amount of U.S. dollars because of Thai depreciation. As Thai baht depreciates export in Thailand will unlikely to increase. Blade Inc. will be benefited against other U.S. competitors because their competitors invoice their product in U.S. dollar while Blade Inc. invoice in Thai baht. So if baht depreciates Thai importers have to pay more baht to dollar in case of payment to other exporters. Question 5: If Blades increases its business in Thailand and experiences serious financial problems, are there any international agencies that the company could approach for loans or other financial assistances? Answer: If Blade Inc. increases its business in Thailand and experience serious financial problems then Blades can call for loan from International Financial Corporation (IFC). IFC not only provides loans to corporations but also purchases stocks. International Financial Corporation acts as a catalyst. It provides loans to promote economic development of private sector. Case: 1 Small business dilemma (Sports Export Company) The factors that affect the current account balance between the United States and the United Kingdom are as follows: (1) Inflation (2) National income (3) Government restrictions

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