How would a weak Swiss franc benefit a Swiss entrepreneur who exports much of his product?
What will be an ideal response?
A weak Swiss franc would allow the entrepreneur to price his goods below local competitors yet still make a profit because, when the revenues are converted back to francs, their value will be equal to or greater than when the franc was worth more.
For example, Bruno sells fine Swiss chocolate around the world. If the current market price for chocolate in the United States is $4.00 per bar and the exchange rate is SFr 1.30/$, Bruno would be get SFr 3.07. If the franc were to weaken and the rate fell to SFr 1.20/$, Bruno could cut his retail price to $3.90 in the United States, potentially gaining market share, and in fact get SFr 3.25 when he brings that money back to Switzerland.
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Failure to record amounts earned for services provided to customers but not yet paid results in which of the following
a. Net income being overstated b. No effect on total assets c. Stockholders' equity being overstated d. Total assets being understated
Mr. Gordon, a resident of Pennsylvania, paid $20,000 for a bond issued by Delaware. This year, he received $800 of interest on the bond. His marginal state tax rate is 7%, and under Pennsylvania law, interest on debt obligations issued by another state is taxable. Mr. Gordon can deduct state income tax on his federal return, and his marginal federal tax rate is 35%. Compute his after-tax rate of return on the bond.
A. 3.825% B. 3.725% C. 4% D. 2.420%
Explain the relevance of the following as they relate to building shareholder value via diversification.a. the industry attractiveness testb. the cost of entry testc. the better-off test
What will be an ideal response?
________ are private individuals who provide seed capital to young ventures.
A. Gazelles B. Cash cows C. Angels D. Rising stars