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International Finance

Please help with the following problem.

When the dollar was strong, and it could no longer earn a reasonable profit margin on European sales, Osmose International gave up its government permits to sell its chemical wood preservatives in much of Europe. "Why pay for a permit when you can't sell anything there anyway?" explained its president.

a. What response do you have for the president of Osmose?
b. How might you go about assessing the trade-offs involved for Osmose?

Solution Preview

a. What response do you have for the president of Osmose?

ANSWER. Maintaining its permits gives Osmose the option to return to the European market if and when the dollar weakened. This option is valuable in a world where exchange rates can fluctuate dramatically and stay at depressed levels for many ...

Solution Summary

The following posting helps with problems regarding international finance problems. Concepts covered in the solution include reasonable profit margins and government permits. Brief solutions are provided for each problem.

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