1. When thinking about the global business environment, there are countries with policies and practices that encourage trade between nations and there are countries with policies and practices that discourage international trade. Discuss why a country would choose to encourage or discourage international trade. Also, as discussed in class, describe (using examples) the various tools that are used to encourage or discourage international trade.

2. The Bluenose division of Schooner Industries manufactures rocking chairs that are sold to consumers through home improvement and furniture stores. In 2019 (last year), the division’s cost of goods sold represented 40% of sales. Their marketing expenses included selling expenses, promotion expenses, and freight. Selling expenses included sales salaries totaling $3 million and sales commissions (5% of sales). The company spent $3 million on advertising last year, and freight costs were 10% of sales. Other costs included $2 million for marketing managerial salaries/expenses and another $3 million for indirect overhead allocated to the division. Bluenose’s sales in 2019 totaled $30 million and their inventory turnover rate was 4.5.

In 2018 (the previous year), Bluenose had the following performance measures:

Gross margin %	55%	Return on investment	4%
Net profit %	8%	Net marketing contribution	$5,000,000
Operating expense %	47%	Inventory turnover rate	4.8

In 2019 (last year), the Bluenose division’s investments totaled $80 million (this included a plant expansion and inventory costs). Compared to 2018, would you say that Bluenose performed better or worse in 2019? Explain your answer using the performance measures we discussed in class.  Tip: to answer this question, it may be useful to create a profit-and-loss statement before doing any calculations.

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1 A country will encourage international trade if it has surplus resources technical superiority nat... View the full answer