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Refer to the Scenario Below to Answer the Following Questions

question 1

Multiple Choice

Refer to the scenario below to answer the following questions.
Herb Marks built his enterprise on the faithful patronage of four specialty shops and a large contract from Elmore Distributors.But after two years,the maker of novelty pens and pencils had to rethink his strategy when his contract with Elmore ended.
Herb built a company reputation on the manufacturing and distribution of a variety of wooden writing utensils with customized engravings.Specialty shops loved to display the products in their fancy,lighted showcases,but such specialty shops alone were not profitable.Herb Marks established a brand name,known merely as Marks,and decided to expand on it.
Herb extended his writing utensil lines to include quills,felt- tip pens,and multiple- cartridge pens that write in different colors.He even added a line of various grades of personalized stationery and business cards.Perhaps Herb's biggest added touch,however,was the addition of two salespeople who would work to explain the diverse array of products offered by Marks,as well as nurture existing accounts.
"We make an excellent product," Herb Marks stated,"and we honor a good guarantee on everything we sell.But let's face it-we face hundreds of competitors! We need Marks representatives out there to help prospects understand what they should demand in something as simple as a writing tool."
The Marks brand was fast- becoming synonymous with top- notch customer service.Part of the purchase package brought personal visits from the Marks representative,before the purchase and long after.
-An easier,more comfortable,more stylish transfer of thought onto paper is the of Herb's offerings.

Assess the net present value of international projects using different currency approaches.

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Apply the concept of purchasing power parity (PPP) in determining exchange rates based on price levels.

Evaluate the impact of political risk on international investments and how it can be managed.

Definitions:

Price Floor

A government-imposed minimum price above the market equilibrium price, preventing the price of a good or service from falling below this level.

Equilibrium Price

The equilibrium price is the market price at which the supply of an item equals its demand, leading to stable market conditions.

Market Imbalances

Situations where the quantity supplied of a good does not equal the quantity demanded, leading to surpluses or shortages.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price.