PART 1.
Discuss the reasons why nondomestic customers might not be willing to buy products and services from a firm selling in a foreign market and the reasons why nondomestic customers may not be able to buy a firm’s products and services even if they are willing. Include a brief description of how your firm (that you selected previously) would approach selling a product or service in a foreign market.PART 2.
Describe the “rules” for bidding firm managers that were discussed in the text. How do these rules differ from the “rules” for target firm managers? Include a brief explanation of each of the rules in your answer.PART 3.
Write a 3 to 5 page paper (750 to 1200 words, not including the cover page and reference page) in APA format in response to the prompts below. Please click here to view the criteria by which you will be assessed for the achievement of the CLO for this unit.
Please use the APA Sample provided in Unit 1 to complete your assignment. In this assignment, you will be assessed on the Institutional Learning Outcome of Quantitative Reasoning. Visit the LIRN to find journal articles that support your positions and cite them using appropriate APA format.
For this case study, use the company you previously selected. Please respond to the following questions:
a. Describe the conditions, if any, where your business (the one you selected in Unit 1) can expect to earn an economic profit from acquiring a new, strategically related, firm after fending off four other bidders. [Chapter 10 Problem Set Question #1 on page 303].
b. Your firm is considering the purchase of a smaller firm because it believes that it can manage the assets of that firm more efficiently. The smaller firm has free cash flow. Some researchers have argued that the existence of free cash flow can lead managers in a firm to make inappropriate acquisition decisions. To avoid these problems, these authors have argued that firms should increase their debt-to-equity ratio and “soak up” free cash flow through interest and principal payments. Is free cash flow a significant problem for many firms?
c. Your firm has decided to begin selling its products in Ghana. Unfortunately, there is not a highly developed trading market for currency in Ghana. However, Ghana does have significant exports of cocoa. Describe a process by which you would be able to sell your machines in Ghana and still translate your earnings into a tradable currency (e.g., dollars or euros).
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