Suppose that a firm is considering opening a plant on the moon, and the current exchange rate is 1,320 moon pieces (mp) per dollar. Also, the wage rate is 23,000 mp per hour. Suppose further thatUS workers can produce 260 units per hour, while workers on the moon are expected to be able to produce 380 units per hour (the lower gravity level helps them work faster)The moon wage rate without considering productivity is $hr (round your response to the nearest penny).b. The moon relative" wage rate considering productivity is Shr (round your response to the nearest penny)Suppose that the US wage rate is $24.00 per hour. If the U.S. managers want to become the location of choice for production, and if they cannot lower their wage rate due to labor unionagreements, what does the labor productivity in the U.S. need to become?The labor produtivity in the U.S. needs to be at least Juntshr (round your response to one decimal place).

Labor productivity is defined as the rate of real output in units per worker in a firm per unit of…

Answered: Suppose that a frm is considering…

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter14: Multinational Capital Budgeting

Section: Chapter Questions

Problem 34QA

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In order to produce a new product, a firm must lease equipment at a cost of $185,000 per year. The managers feel that they can sell 67,000 units per year at a price of $92. What is the highest variable cost that will allow the firm to at least break even on this project? (Round your answer to 2 decimal places.)
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Davao has a potential foreign customer that has offered to buy 1,500 tons at P450 per ton. Assume that all of Davao’s costs would be at the same levels and rates as last year. What net income after taxes would Davao make if it took this order and rejected some business from regular customers so as not to exceed capacity? If the sales volume is estimated to be 2,100 tons in the next year, and if the prices and costs stay at the same levels and amounts next year, the after-tax income that Davao can expect for next year is? Assume that Davao plans to market its product in a new territory. Davao estimates that an advertising and promotion program costing P61,500 annually would need to be undertaken for the next two or three years. In addition, a P25 per ton sales commission over and above the current commission to the sales force in the new territory would be required. How many tons would have to be sold in the new territory to maintain Davao’s current after-tax income of P94,500?

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