Q1: Using above data which manufacturing location provides Polaris with the greatest cost savings? Considering if they plan to open a manufacturing plant in Mexico and china they will need to hire 60 new labors!

Q2: Would your recommendation change if foreign exchange rates increased or decreased by 15%?

Q3: Assuming all else is constant, would your recommendation change if labor rates in Mexico increased by 20% annually?

Exhibit 2: Labor Assumptions \begin{tabular}{lccccc} \hline & \multicolumn{2}{c}{ Monthly Wages } & & \multicolumn{2}{c}{ Annual Wage Growth (\%) } \\ \cline { 2 - 3 } \cline { 5 - 6 } & China ( CNY) & MexiCo ( MXN) & & China (CNY) & MexiCo (MXN) \\ \hline 1999 & 649.5 & 2,392.0 & & & \\ 2000 & 729.2 & 2,910.5 & & 12 & 22 \\ 2001 & 814.5 & 3,367.6 & & 12 & 16 \\ 2002 & 916.8 & 3,537.5 & & 13 & 5 \\ 2003 & 1,041.3 & 3,737.7 & & 14 & 6 \\ 2004 & 1,169.4 & 3,858.8 & & 12 & 3 \\ 2005 & 1,313.1 & 3,983.8 & & 12 & 3 \\ 2006 & 1,497.2 & 4,112.9 & & 14 & 3 \\ 2007 & 1,740.3 & 4,246.2 & & 16 & 3 \\ 2008 & 2,016.0 & 4,383.7 & & 16 & 3 \end{tabular} \begin{tabular}{lr} \hline \multicolumn{2}{c}{ United States } \\ Hourly wage & $26/ hour \\ Working months/year & 12 \\ \hline \end{tabular} Exhibit 3: Operatina Metrics bv Plant Location - If Polaris moved production of Side-by-Sides abroad, the company planned to lay off sixty workers at its Roseau plant. Each worker would be paid a one-time severance of $20,000 - Given the weak economic environment, Polaris assumed that demand for Side-by-Sides would remain flat for the next five years. Fxhihit 5. Fxchance Rate Hictory CNY=Chineseyuan Fyhihit . Memand Accmntione