King, Inc., a U.S. firm, is considering the establishment of a small subsidiary in Bulgaria that would produce food products. All ingredients can be obtained or produced in Bulgaria. The final products to be produced by the subsidiary will be sold in Bulgaria and other Eastern European countries. The company is very interested in this project, as it faces little competition in that area. Three of King's high-level managers have been assigned the task of assessing the country risk of Bulgaria. Specifically, they were asked to list all characteristics of Bulgaria that could adversely affect the performance of this project. The decision on whether to undertake this project will be made only after this country risk analysis is completed and accounted for in the capital budgeting analysis. Because King has focused exclusively on domestic business in the past, it is not accustomed to country risk analysis.

What factors related to Bulgaria's government should the company consider?

What country-related factors might affect the demand for the food products to be produced by King, Inc.?

What country-related factors might affect the cost of production?

Answer rating: 100% (QA)

When assessing the country risk of Bulgaria King Inc should consider several factors related to the government demand for the food products and the cost of production a Government Stability and Polici... View the full answer