Chapter 1
#z #z
Multinational Financial Management:
#z #z # z An Overview
#z
Lecture Outline
#z
Managing #zthe #zMNC
How #zBusiness #zDisciplines #zAre #zUsed #zto #zManage #zthe
#zMNC #zAgency #zProblems
Management #zStructure #zof #zan #zMNC
Why #zFirms #zPursue #zInternational
#zBusiness #zTheory #zof #zComparative
Advantage # z Imperfect #zMarkets #zTheory
#z
Product #zCycle #zTheory
Methods #zto #zConduct #zInternational #zBusiness
International #zTrade
#zLicensing
#zFranchising
Joint #zVentures
Acquisitions #zof #zExisting #zOperations
#zEstablishing #zNew #zForeign
#zSubsidiaries #zSummary #zof #zMethods
Valuation #zModel #zfor #zan #zMNC
#zDomestic #zValuation #zModel
#zMultinational #zValuation #zModel
Uncertainty #zSurrounding #zan #zMNC’s #zCash #zFlows
#zHow #zUncertainty #zAffects #zthe #zMNC’s #zCost #zof
#zCapital
Organization #zof #zthe #zText
© #z2021 #zCengage #zLearning. #zAll #zRights #zReserved. #zMay #znot #zbe #zcopied, #zscanned, #zor #zduplicated, #zin #zwhole #zor #zin #zpart,
#zexcept #zfor #zuse #zas # z permitted #zin #za #zlicense #zdistributed #zwith #za #zcertain #zproduct #zor #zservice #zor #zotherwise #zon #za
#zpassword-protected #zwebsite #zfor #zclassroom #zuse.
, Multinational #zFinancial #zManagement: #zAn #zOverview #z
2
#z
Chapter Theme #z
This chapter introduces the multinational corporation as having similar goals to the purely domestic
corporation, but a wider variety of opportunities. With additional opportunities come potential increased
returns and other forms of risk to consider. The potential benefits and risks are introduced.
Topics to Stimulate Class Discussion
1. What is the appropriate definition of an MNC?
2. Why does an MNC expand internationally?
3. What are the risks of an MNC which expands internationally?
4. Why must purely domestic firms be concerned about the international environment?
POINT/COUNTER-POINT:
Should an MNC Reduce Its Ethical Standards to Compete Internationally?
POINT: Yes. When a U.S.-based MNC competes in some countries, it may encounter some business
norms there that are not allowed in the U.S. For example, when competing for a government contract,
firms might provide payoffs to the government officials who will make the decision. Yet, in the United
States, a firm will sometimes take a client on an expensive golf outing or provide skybox tickets to
events. This is no different than a payoff. If the payoffs are bigger in some foreign countries, the MNC
can compete only by matching the payoffs provided by its competitors.
COUNTER-POINT: No. A U.S.-based MNC should maintain a standard code of ethics that applies to
any country, even if it is at a disadvantage in a foreign country that allows activities that might be viewed
as unethical. In this way, the MNC establishes more credibility worldwide.
WHO IS CORRECT? Use the Internet to learn more about this issue. Which argument do you support?
Offer your own opinion on this issue.
ANSWER: The issue is frequently discussed. It is easy to suggest that the MNC should maintain a
standard code of ethics, but in reality, that means that it will not be able to compete in some cases. For
example, even if it submits the lowest bid on a specific foreign government project, it will not receive the
bid without a payoff to the foreign government officials. The issue is especially a concern for large
projects that may generate substantial cash flows for the firm that is chosen to do the project. Ideally, the
MNC can clearly demonstrate to whoever oversees the decision process that it deserves to be selected. If
there is just one decision-maker with no oversight, an MNC can not ensure that the decision will be
ethical. But if the decision-maker must be accountable to a department who oversees the decision, the
MNC may be able to prompt the department to ensure that the process is ethical.
© #z2021 #zCengage #zLearning. #zAll #zRights #zReserved. #zMay #znot #zbe #zcopied, #zscanned, #zor #zduplicated, #zin #zwhole #zor #zin #zpart,
#zexcept #zfor #zuse #zas # z permitted #zin #za #zlicense #zdistributed #zwith #za #zcertain #zproduct #zor #zservice #zor #zotherwise #zon #za
#zpassword-protected #zwebsite #zfor #zclassroom #zuse.
, Multinational #zFinancial #zManagement: #zAn #zOverview #z
3
#z
Answers to End of Chapter Questions
#z #z #z #z #z
1. Agency #zProblems #zof #zMNCs.
a. Explain #zthe #zagency #zproblem #zof #zMNCs.
ANSWER: # z The #zagency #zproblem #zreflects #za #zconflict #zof #zinterests #zbetween #zdecision-making
#zmanagers #zand #zthe #zowners #zof #zthe #zMNC. # z Agency #zcosts #zoccur #zin #zan #zeffort #zto #zassure #zthat
#zmanagers #zact #zin #zthe #zbest #zinterest #zof #zthe #zowners.
b. Why #zmight #zagency #zcosts #zbe #zlarger #zfor #zan #zMNC #zthan #zfor #za #zpurely #zdomestic #zfirm?
ANSWER: # z The #zagency #zcosts #zare #znormally #zlarger #zfor #zMNCs #zthan #zpurely #zdomestic #zfirms
#zfor #zthe #zfollowing #zreasons. # z First, #zMNCs #zincur #zlarger #zagency #zcosts #zin #zmonitoring #zmanagers
#zof #zdistant #zforeign #zsubsidiaries. # z Second, #zforeign #zsubsidiary #zmanagers #zraised #zin #zdifferent
#zcultures #zmay #znot #zfollow #zuniform #zgoals, #zand #zsome #zmanagers #zmay #zfocus #zon #zsatisfying
#zrespective #zemployees. # z Third, #zthe #zsheer #zsize #zof #zthe #zlarger #zMNCs #zwould #zalso #zcreate #zlarge
#zagency #zproblems.
2. Comparative #zAdvantage.
a. Explain #zhow #zthe #ztheory #zof #zcomparative #zadvantage #zrelates #zto #zthe #zneed #zfor #zinternational
#zbusiness.
ANSWER: # z The #ztheory #zof #zcomparative #zadvantage #zimplies #zthat #zcountries #zshould #zspecialize
#zin #zproduction, #zthereby #zrelying #zon #zother #zcountries #zfor #zsome #zproducts. # z Consequently, #zthere
#zis #za #zneed #zfor #zinternational #zbusiness.
b. Explain #zhow #zthe #zproduct #zcycle #ztheory #zrelates #zto #zthe #zgrowth #zof #zan #zMNC.
ANSWER: #zThe #zproduct #zcycle #ztheory #zsuggests #zthat #zat #zsome #zpoint #zin #ztime, #zthe #zfirm #zwill
#zattempt #zto #zcapitalize #zon #zits #zperceived #zadvantages #zin #zmarkets #zother #zthan #zwhere #zit #zwas
#zinitially #zestablished.
3. Imperfect #zMarkets.
a. Explain #zhow #zthe #zexistence #zof #zimperfect #zmarkets #zhas #zled #zto #zthe #zestablishment #zof
#zsubsidiaries #zin #zforeign #zmarkets.
ANSWER: # z Because #zof #zimperfect #zmarkets, #zresources #zcannot #zbe #zeasily #zand #zfreely
#zretrieved #zby #zthe #zMNC. # z Consequently, #zthe #zMNC #zmust #zsometimes #zgo #zto #zthe #zresources
#zrather #zthan #zretrieve #zresources #z(such #zas #zland, #zlabor, #zetc.).
b. If #zperfect #zmarkets #zexisted, #zwould #zwages, #zprices, #zand #zinterest #zrates #zamong #zcountries
#zbe #zmore #zsimilar #zor #zless #zsimilar #zthan #zunder #zconditions #zof #zimperfect #zmarkets?
# z Why?
ANSWER: #zIf #zperfect #zmarkets #zexisted, #zresources #zwould #zbe #zmore #zmobile #zand #zcould #ztherefore
#zbe #ztransferred #zto #zthose #zcountries #zmore #zwilling #zto #zpay #za #zhigh #zprice #zfor #zthem. # z As #zthis
#zoccurred, #zshortages #zof #zresources #zin #zany #zparticular #zcountry #zwould #zbe #zalleviated #zand #zthe
#zcosts #zof #zsuch #zresources #zwould #zbe #zsimilar #zacross #zcountries.
© #z2021 #zCengage #zLearning. #zAll #zRights #zReserved. #zMay #znot #zbe #zcopied, #zscanned, #zor #zduplicated, #zin #zwhole #zor #zin #zpart,
#zexcept #zfor #zuse #zas # z permitted #zin #za #zlicense #zdistributed #zwith #za #zcertain #zproduct #zor #zservice #zor #zotherwise #zon #za
#zpassword-protected #zwebsite #zfor #zclassroom #zuse.
, Multinational #zFinancial #zManagement: #zAn #zOverview #z
4
#z
4. International #zOpportunities.
a. Do #zyou #zthink #zthat #zeither #zthe #zacquisition #zof #za #zforeign #zfirm #zor #zlicensing #zwill #zresult #zin
#zgreater #zgrowth #zfor #zan #zMNC? #zWhich #zalternative #zis #zlikely #zto #zhave #zmore #zrisk?
ANSWER: # z An #zacquisition #zwill #ztypically #zresult #zin #zgreater #zgrowth, #zbut #zit #zis #zriskier #zbecause #zit
#znormally #zrequires #za #zlarger #zinvestment #zand #zthe #zdecision #zcan #znot #zbe #zeasily #zreversed #zonce #zthe
#zacquisition #zis #zmade.
b. Describe #za #zscenario #zin #zwhich #zthe #zsize #zof #za #zcorporation #zis #znot #zaffected #zby #zaccess #zto
#zinternational #zopportunities.
ANSWER: #zSome #zfirms #zmay #zavoid #zopportunities #zbecause #zthey #zlack #zknowledge #zabout #zforeign
#zmarkets #zor #zexpect #zthat #zthe #zrisks #zare #zexcessive. # z Thus, #zthe #zsize #zof #zthese #zfirms #zis #znot
#zaffected #zby #zthe #zopportunities.
c. Explain #zwhy #zMNCs #zsuch #zas #zCoca #zCola #zand #zPepsiCo #zstill #zhave #znumerous
#zopportunities #zfor #zinternational #zexpansion.
ANSWER: #zCoca #zCola #zand #zPepsiCo #zstill #zhave #znew #zinternational #zopportunities #zbecause #zcountries
#zare #zat #zvarious #zstages #zof #zdevelopment. # z Some #zcountries #zhave #zjust #zrecently #zopened #ztheir #zborders
#zto #zMNCs.
Many #zof #zthese #zcountries #zdo #znot #zoffer #zsufficient #zfood #zor #zdrink #zproducts #zto #ztheir #zconsumers.
5. International #zOpportunities #zDue #zto #zthe #zInternet.
a. What #zfactors #zcause #zsome #zfirms #zto #zbecome #zmore #zinternationalized #zthan #zothers?
ANSWER: #zThe #zoperating #zcharacteristics #zof #zthe #zfirm #z(what #zit #zproduces #zor #zsells) #zand #zthe #zrisk
#zperception #zof #zinternational #zbusiness #zwill #zinfluence #zthe #zdegree #zto #zwhich #za #zfirm #zbecomes
#zinternationalized. # z Several #zother #zfactors #zsuch #zas #zaccess #zto #zcapital #zcould #zalso #zbe #zrelevant #zhere.
# z Firms #zthat #zare #zlabor-intensive #zcould #zmore #zeasily #zcapitalize #zon #zlow-wage #zcountries #zwhile #zfirms
#zthat #zrely #zon #ztechnological #zadvances #zcould #znot.
b. Why #zmight #zthe #zInternet #zhave #zresulted #zin #zmore #zinternational #zbusiness.
ANSWER: #zThe #zInternet #zallows #zfor #zeasy #zand #zlow-cost #zcommunication #zbetween #zcountries, #zso
#zthat # z firms #zcould #znow #zdevelop #zcontacts #zwith #zpotential #zcustomers #zoverseas #zby #zhaving #za
#zwebsite. #zMany #zfirms #zuse #ztheir #zwebsite #zto #zidentify #zthe #zproducts #zthat #zthey #zsell, #zalong #zwith
#zthe #zprices #zfor #zeach #zproduct. # z This #zallows #zthem #zto #zeasily #zadvertise #ztheir #zproducts #zto
#zpotential #zimporters #zanywhere #zin #zthe #zworld #zwithout #zmailing #zbrochures #zto #zvarious #zcountries.
# z In #zaddition, #zthey #zcan #zadd #zto #ztheir #zproduct #zline #zand #zchange #zprices #zby #zsimply #zrevising #ztheir
#zwebsite, #zso #zimporters #zare #zkept #zabreast #zof #zthe #zexporter’s #zproduct #zinformation #zby #zmonitoring
#zthe #zexporter’s #zwebsite #zperiodically. #zFirms #zcan #zalso #zuse #ztheir #zwebsites #zto #zaccept #zorders
#zonline. # z Some #zfirms #zwith #zan #zinternational #zreputation #zuse #ztheir #zbrand #zname #zto #zadvertise
#zproducts #zover #zthe #zinternet. # z They #zmay #zuse #zmanufacturers #zin #zsome #zforeign #zcountries #zto
#zproduce #zsome #zof #ztheir #zproducts #zsubject #zto #ztheir #zspecification
6. Impact #zof #zExchange #zRate #zMovements. #zPlak #zCo. #zof #zChicago #zhas #zseveral #zEuropean
#zsubsidiaries #zthat #zremit #zearnings #zto #zit #zeach #zyear. #zExplain #zhow #zappreciation #zof #zthe #zeuro #z(the
#zcurrency #zused #zin #zmany #zEuropean #zcountries) #zwould #zaffect #zPlak's #zvaluation.
ANSWER: # z Plak’s #zvaluation #zshould #zincrease #zbecause #zthe #zappreciation #zof #zthe #zeuro #zwill
#zincrease #zthe #zdollar #zvalue #zof #zthe #zcash #zflows #zremitted #zby #zthe #zEuropean #zsubsidiaries.
© #z2021 #zCengage #zLearning. #zAll #zRights #zReserved. #zMay #znot #zbe #zcopied, #zscanned, #zor #zduplicated, #zin #zwhole #zor #zin #zpart,
#zexcept #zfor #zuse #zas # z permitted #zin #za #zlicense #zdistributed #zwith #za #zcertain #zproduct #zor #zservice #zor #zotherwise #zon #za
#zpassword-protected #zwebsite #zfor #zclassroom #zuse.
#z #z
Multinational Financial Management:
#z #z # z An Overview
#z
Lecture Outline
#z
Managing #zthe #zMNC
How #zBusiness #zDisciplines #zAre #zUsed #zto #zManage #zthe
#zMNC #zAgency #zProblems
Management #zStructure #zof #zan #zMNC
Why #zFirms #zPursue #zInternational
#zBusiness #zTheory #zof #zComparative
Advantage # z Imperfect #zMarkets #zTheory
#z
Product #zCycle #zTheory
Methods #zto #zConduct #zInternational #zBusiness
International #zTrade
#zLicensing
#zFranchising
Joint #zVentures
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#zEstablishing #zNew #zForeign
#zSubsidiaries #zSummary #zof #zMethods
Valuation #zModel #zfor #zan #zMNC
#zDomestic #zValuation #zModel
#zMultinational #zValuation #zModel
Uncertainty #zSurrounding #zan #zMNC’s #zCash #zFlows
#zHow #zUncertainty #zAffects #zthe #zMNC’s #zCost #zof
#zCapital
Organization #zof #zthe #zText
© #z2021 #zCengage #zLearning. #zAll #zRights #zReserved. #zMay #znot #zbe #zcopied, #zscanned, #zor #zduplicated, #zin #zwhole #zor #zin #zpart,
#zexcept #zfor #zuse #zas # z permitted #zin #za #zlicense #zdistributed #zwith #za #zcertain #zproduct #zor #zservice #zor #zotherwise #zon #za
#zpassword-protected #zwebsite #zfor #zclassroom #zuse.
, Multinational #zFinancial #zManagement: #zAn #zOverview #z
2
#z
Chapter Theme #z
This chapter introduces the multinational corporation as having similar goals to the purely domestic
corporation, but a wider variety of opportunities. With additional opportunities come potential increased
returns and other forms of risk to consider. The potential benefits and risks are introduced.
Topics to Stimulate Class Discussion
1. What is the appropriate definition of an MNC?
2. Why does an MNC expand internationally?
3. What are the risks of an MNC which expands internationally?
4. Why must purely domestic firms be concerned about the international environment?
POINT/COUNTER-POINT:
Should an MNC Reduce Its Ethical Standards to Compete Internationally?
POINT: Yes. When a U.S.-based MNC competes in some countries, it may encounter some business
norms there that are not allowed in the U.S. For example, when competing for a government contract,
firms might provide payoffs to the government officials who will make the decision. Yet, in the United
States, a firm will sometimes take a client on an expensive golf outing or provide skybox tickets to
events. This is no different than a payoff. If the payoffs are bigger in some foreign countries, the MNC
can compete only by matching the payoffs provided by its competitors.
COUNTER-POINT: No. A U.S.-based MNC should maintain a standard code of ethics that applies to
any country, even if it is at a disadvantage in a foreign country that allows activities that might be viewed
as unethical. In this way, the MNC establishes more credibility worldwide.
WHO IS CORRECT? Use the Internet to learn more about this issue. Which argument do you support?
Offer your own opinion on this issue.
ANSWER: The issue is frequently discussed. It is easy to suggest that the MNC should maintain a
standard code of ethics, but in reality, that means that it will not be able to compete in some cases. For
example, even if it submits the lowest bid on a specific foreign government project, it will not receive the
bid without a payoff to the foreign government officials. The issue is especially a concern for large
projects that may generate substantial cash flows for the firm that is chosen to do the project. Ideally, the
MNC can clearly demonstrate to whoever oversees the decision process that it deserves to be selected. If
there is just one decision-maker with no oversight, an MNC can not ensure that the decision will be
ethical. But if the decision-maker must be accountable to a department who oversees the decision, the
MNC may be able to prompt the department to ensure that the process is ethical.
© #z2021 #zCengage #zLearning. #zAll #zRights #zReserved. #zMay #znot #zbe #zcopied, #zscanned, #zor #zduplicated, #zin #zwhole #zor #zin #zpart,
#zexcept #zfor #zuse #zas # z permitted #zin #za #zlicense #zdistributed #zwith #za #zcertain #zproduct #zor #zservice #zor #zotherwise #zon #za
#zpassword-protected #zwebsite #zfor #zclassroom #zuse.
, Multinational #zFinancial #zManagement: #zAn #zOverview #z
3
#z
Answers to End of Chapter Questions
#z #z #z #z #z
1. Agency #zProblems #zof #zMNCs.
a. Explain #zthe #zagency #zproblem #zof #zMNCs.
ANSWER: # z The #zagency #zproblem #zreflects #za #zconflict #zof #zinterests #zbetween #zdecision-making
#zmanagers #zand #zthe #zowners #zof #zthe #zMNC. # z Agency #zcosts #zoccur #zin #zan #zeffort #zto #zassure #zthat
#zmanagers #zact #zin #zthe #zbest #zinterest #zof #zthe #zowners.
b. Why #zmight #zagency #zcosts #zbe #zlarger #zfor #zan #zMNC #zthan #zfor #za #zpurely #zdomestic #zfirm?
ANSWER: # z The #zagency #zcosts #zare #znormally #zlarger #zfor #zMNCs #zthan #zpurely #zdomestic #zfirms
#zfor #zthe #zfollowing #zreasons. # z First, #zMNCs #zincur #zlarger #zagency #zcosts #zin #zmonitoring #zmanagers
#zof #zdistant #zforeign #zsubsidiaries. # z Second, #zforeign #zsubsidiary #zmanagers #zraised #zin #zdifferent
#zcultures #zmay #znot #zfollow #zuniform #zgoals, #zand #zsome #zmanagers #zmay #zfocus #zon #zsatisfying
#zrespective #zemployees. # z Third, #zthe #zsheer #zsize #zof #zthe #zlarger #zMNCs #zwould #zalso #zcreate #zlarge
#zagency #zproblems.
2. Comparative #zAdvantage.
a. Explain #zhow #zthe #ztheory #zof #zcomparative #zadvantage #zrelates #zto #zthe #zneed #zfor #zinternational
#zbusiness.
ANSWER: # z The #ztheory #zof #zcomparative #zadvantage #zimplies #zthat #zcountries #zshould #zspecialize
#zin #zproduction, #zthereby #zrelying #zon #zother #zcountries #zfor #zsome #zproducts. # z Consequently, #zthere
#zis #za #zneed #zfor #zinternational #zbusiness.
b. Explain #zhow #zthe #zproduct #zcycle #ztheory #zrelates #zto #zthe #zgrowth #zof #zan #zMNC.
ANSWER: #zThe #zproduct #zcycle #ztheory #zsuggests #zthat #zat #zsome #zpoint #zin #ztime, #zthe #zfirm #zwill
#zattempt #zto #zcapitalize #zon #zits #zperceived #zadvantages #zin #zmarkets #zother #zthan #zwhere #zit #zwas
#zinitially #zestablished.
3. Imperfect #zMarkets.
a. Explain #zhow #zthe #zexistence #zof #zimperfect #zmarkets #zhas #zled #zto #zthe #zestablishment #zof
#zsubsidiaries #zin #zforeign #zmarkets.
ANSWER: # z Because #zof #zimperfect #zmarkets, #zresources #zcannot #zbe #zeasily #zand #zfreely
#zretrieved #zby #zthe #zMNC. # z Consequently, #zthe #zMNC #zmust #zsometimes #zgo #zto #zthe #zresources
#zrather #zthan #zretrieve #zresources #z(such #zas #zland, #zlabor, #zetc.).
b. If #zperfect #zmarkets #zexisted, #zwould #zwages, #zprices, #zand #zinterest #zrates #zamong #zcountries
#zbe #zmore #zsimilar #zor #zless #zsimilar #zthan #zunder #zconditions #zof #zimperfect #zmarkets?
# z Why?
ANSWER: #zIf #zperfect #zmarkets #zexisted, #zresources #zwould #zbe #zmore #zmobile #zand #zcould #ztherefore
#zbe #ztransferred #zto #zthose #zcountries #zmore #zwilling #zto #zpay #za #zhigh #zprice #zfor #zthem. # z As #zthis
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#zpassword-protected #zwebsite #zfor #zclassroom #zuse.
, Multinational #zFinancial #zManagement: #zAn #zOverview #z
4
#z
4. International #zOpportunities.
a. Do #zyou #zthink #zthat #zeither #zthe #zacquisition #zof #za #zforeign #zfirm #zor #zlicensing #zwill #zresult #zin
#zgreater #zgrowth #zfor #zan #zMNC? #zWhich #zalternative #zis #zlikely #zto #zhave #zmore #zrisk?
ANSWER: # z An #zacquisition #zwill #ztypically #zresult #zin #zgreater #zgrowth, #zbut #zit #zis #zriskier #zbecause #zit
#znormally #zrequires #za #zlarger #zinvestment #zand #zthe #zdecision #zcan #znot #zbe #zeasily #zreversed #zonce #zthe
#zacquisition #zis #zmade.
b. Describe #za #zscenario #zin #zwhich #zthe #zsize #zof #za #zcorporation #zis #znot #zaffected #zby #zaccess #zto
#zinternational #zopportunities.
ANSWER: #zSome #zfirms #zmay #zavoid #zopportunities #zbecause #zthey #zlack #zknowledge #zabout #zforeign
#zmarkets #zor #zexpect #zthat #zthe #zrisks #zare #zexcessive. # z Thus, #zthe #zsize #zof #zthese #zfirms #zis #znot
#zaffected #zby #zthe #zopportunities.
c. Explain #zwhy #zMNCs #zsuch #zas #zCoca #zCola #zand #zPepsiCo #zstill #zhave #znumerous
#zopportunities #zfor #zinternational #zexpansion.
ANSWER: #zCoca #zCola #zand #zPepsiCo #zstill #zhave #znew #zinternational #zopportunities #zbecause #zcountries
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#zto #zMNCs.
Many #zof #zthese #zcountries #zdo #znot #zoffer #zsufficient #zfood #zor #zdrink #zproducts #zto #ztheir #zconsumers.
5. International #zOpportunities #zDue #zto #zthe #zInternet.
a. What #zfactors #zcause #zsome #zfirms #zto #zbecome #zmore #zinternationalized #zthan #zothers?
ANSWER: #zThe #zoperating #zcharacteristics #zof #zthe #zfirm #z(what #zit #zproduces #zor #zsells) #zand #zthe #zrisk
#zperception #zof #zinternational #zbusiness #zwill #zinfluence #zthe #zdegree #zto #zwhich #za #zfirm #zbecomes
#zinternationalized. # z Several #zother #zfactors #zsuch #zas #zaccess #zto #zcapital #zcould #zalso #zbe #zrelevant #zhere.
# z Firms #zthat #zare #zlabor-intensive #zcould #zmore #zeasily #zcapitalize #zon #zlow-wage #zcountries #zwhile #zfirms
#zthat #zrely #zon #ztechnological #zadvances #zcould #znot.
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#zthe #zprices #zfor #zeach #zproduct. # z This #zallows #zthem #zto #zeasily #zadvertise #ztheir #zproducts #zto
#zpotential #zimporters #zanywhere #zin #zthe #zworld #zwithout #zmailing #zbrochures #zto #zvarious #zcountries.
# z In #zaddition, #zthey #zcan #zadd #zto #ztheir #zproduct #zline #zand #zchange #zprices #zby #zsimply #zrevising #ztheir
#zwebsite, #zso #zimporters #zare #zkept #zabreast #zof #zthe #zexporter’s #zproduct #zinformation #zby #zmonitoring
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#zproducts #zover #zthe #zinternet. # z They #zmay #zuse #zmanufacturers #zin #zsome #zforeign #zcountries #zto
#zproduce #zsome #zof #ztheir #zproducts #zsubject #zto #ztheir #zspecification
6. Impact #zof #zExchange #zRate #zMovements. #zPlak #zCo. #zof #zChicago #zhas #zseveral #zEuropean
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#zcurrency #zused #zin #zmany #zEuropean #zcountries) #zwould #zaffect #zPlak's #zvaluation.
ANSWER: # z Plak’s #zvaluation #zshould #zincrease #zbecause #zthe #zappreciation #zof #zthe #zeuro #zwill
#zincrease #zthe #zdollar #zvalue #zof #zthe #zcash #zflows #zremitted #zby #zthe #zEuropean #zsubsidiaries.
© #z2021 #zCengage #zLearning. #zAll #zRights #zReserved. #zMay #znot #zbe #zcopied, #zscanned, #zor #zduplicated, #zin #zwhole #zor #zin #zpart,
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#zpassword-protected #zwebsite #zfor #zclassroom #zuse.
