Question: Newport Circuits is trying to decide whether to shift production
Newport Circuits is trying to decide whether to shift production overseas of its relatively expensive integrated circuits (they average around $11 each). Offshore assembly would save about 11.1¢ per chip in labor costs. However, by producing offshore, it would take about five weeks to get the parts to customers, in contrast to one week with domestic manufacturing. Thus, offshore production would force Newport to carry another four weeks of inventory. In addition, offshore production would entail combined shipping and customs duty costs of 3.2¢. Suppose Newport's cost of funds is 15%. Will it save money by shifting production offshore?
Answer to relevant Questions1. What advantages does General Electric seek to attain from its international business activities?2. What actions is it taking to gain these advantages from its international activities?3. What risks does GE face in its ...a. What is the capital asset pricing model?b. What is the basic message of the CAPM?c. How might a multinational firm use the CAPM?1. How did China and Japan manage to weaken their currencies against the dollar?2. Why did the U.S. dollar and U.S. Treasury bonds fall in response to the G7 statement?3. What is the link between currency intervention and ...Tiger Car Corporation, a leading Japanese automaker, is considering a proposal to locate a factory abroad in Tennessee. Although labor costs would rise by ¥33,000 per car, the time in transit for the cars (to be sold in the ...In comparisons of a multinational firm's reported foreign profits with domestic profits, caution must be exercised. This same caution must also be applied when analyzing the reported profits of the firm's various ...
Post your question