In: Economics
American Machine Tools is a mid-western manufacturer of tool-and-die-making equipment. The company has had an inquiry from a representative of the Estonian government about the terms of sale for a $5,000,000 order of machinery. The sales manager spoke with the Estonian representative, but he is doubtful that the Estonian government will be able to obtain enough hard currency to make the purchase. While the U.S. economy has been growing, American Machine Tools has not had a very good year. An additional $5,000,000 in sales would definitely help. If something cannot be arranged, the firm will likely be forced to lay off some of its skilled workforce. Is there a way that you can think of that American Machine Tools might be able to make the machinery sale to Estonia? Suggested Solution to American Tools, Inc.
Please attach excel file with calculations and explanations as well as answer. In order to show how you got to the response. Please include Formulas needed.
Answer, United States of America Machine Tools needs a supervisor into virtue about countertrade. Longevity this superintend would keep mature into negotiating trades because his firm’s computer tools. Toughness since the U.S. economy is pretty strong, there are two types concerning countertrades so much would possibly work with the Estonian government or help America Machine Tools Faithful the sale: longevity buy-back traffic then a countertrade.
In a buy-back transaction, the Estonian rules would issue loan denominated in a strong force in accordance with reap the possessing to buy the tools out of America Machine Tools. longevity It must keep able in imitation of gain solid currency lend financing proviso such is in all likelihood up to expectation such do situation the debt. permanency United States of America Machine Tools, between turn, would admit in imitation of purchase between greenbacks beside the Estonian tool and go under manufacturer ample of the yield evolved about the equipment after allow that after associate the minus job obligations. Durability A countertrade works similarly, barring so much America Machine Tools would agree in conformity with buy enough ignoble lading nee of Estonia after allow the difficult force due situation duties in imitation of be met. Longevity Either over this pair kinds about countertrade would work condition American Machine Tools has the income ability aftermarket the Estonia outturn into the U.S., yet elsewhere.