Question

 

 

 

Here's the context in which you should write your final exam. Bronner's Christmas store is one of the largest in America. Bronners currently has one store located in Frankenmuth, Michigan. Bronner's has decided to open up a second store in Heidelberg Germany. Reflecting on each chapter in our textbook, respond to each of the following questions as though you were hired to be a consultant to Bronner's.

 

8. Should runners invest in property in Germany? What are some of the risks of owning property in a foreign country?

Answer 1

Bronner should invest or not solely deepend on them after considering the following situation. There are risks when we have to invest in foreign country some of them are as follows:

• ​​​​​​Economic risk that include country ability to pay back its debts as Country with stable finances and stronger economy would provide more reliable investement.
• Political risk political decisions made in the country might result in an unanticipated loss to investor.
• Sovereign risk that a foreign central bank might alter its foreign exchange regulation.
• Size of local market as choices, tastes of the people are not same in each and every country so the local market may vary.
• Transport and infrastructure is a key factor in the desirablity of investment. A country may have low labour cost but if transportaion cost is high its a drawback.
• Wage rates its a main incentive for a multinational to invest abroad is to outsource labour intensive production to countries with low wages.
• labour skills some industries require higher skilled labour for example pharmaceuticals and electronics. So high labour productivity and skills are required.