McDonalds

1.The price of the U.S. dollar in terms of Brazillian Real is 2.5.

2.The price of the Japanese yen relative to the dollar will fall by 3%.

3. E = P Baht / P $

Fact: % change in E = % change in Baht - % change in $

The inflation rate of Thailand is 12%

The inflation rate of U.S.A. is 2%

E= 12%/ 2%

Fact: % change in E = 12%-2%

= 10% (rise)

So, E= 10% of 5 Baht/$

= 0.5

The new exchange rate at the end of the year would be 5+0.5= 5.5 Baht/$.

4. I'm in danger of losing contract because the U.K. is offering the cheaper price.

According to this calculation;

$300,000 * Norwegian Kroner 7 = 2,100,000 Norwegian Kroner.

GBP 160,000 * Norwegian Kroner 12 = 1,920,000 Norwegian Kroner.

As I see from above, it shows me that I have a higher price than a competitor from the U.K.

7. Before make a decision we need answer these questions:

1. How high are transport cost and tariff?

a. Dasani, Bottled Water-------------> High

b. PC Hardware, IBM/Lenovo------> High

c. Hotel Marriot-----------------------> High

e. Milka Chocolates------------------> Low then export (trade)

2. Is know-how amenable to licensing?

a. Dasani, Bottled Water-------------> Yes

b. PC Hardware, IBM/Lenovo------> Yes

c. Hotel Marriot-----------------------> Yes

3. Is tight control over foreign operations required?

a. Dasani, Bottled Water-------------> Yes then FDI

b. PC Hardware, IBM/Lenovo------> No

c. Hotel Marriot-----------------------> No

4. Can know-how be protected by licensing contract?

b. PC Hardware, IBM/Lenovo------> No then FDI

c. Hotel Marriot-----------------------> Yes then license/ franchise

In my