Fembooks Bookstore Sells Books Only Over the Internet

question 29

Short Answer

Fembooks Bookstore sells books only over the internet. It has established an excellent reputation for finding out-of-print and hard-to-find books of interest to women. The CEO of Fembooks is considering going global with the business, since it is already established on the internet.
The vice president of Fembooks argues that they will encounter too many difficulties in taking the business global via the internet. The president argues that the benefits would be worth the problems encountered. Which of the following statements, if true, would support the argument of the vice president against going global?
While English is the dominant language of the internet, more local traffic would be generated by Web pages in the local language.
Being a niche business, going global over the internet would not put a huge strain on existing personnel.
Shipping books overseas could easily be handled by UPS, FedEx, or air mail.
Sales predictions for overseas expansion anticipate an initial 30 percent increase, then tapering off to a 20 percent increase annually.
Increased internet advertising costs would be a fairly inexpensive investment to increase business on a global basis.

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Definitions:

Standard Deviations

A measure of the dispersion or variation in a set of values, used to indicate volatility in financial markets.

Portfolio's Risk

The exposure to uncertainty and potential financial loss inherent in a portfolio, influenced by the volatility and correlation of its individual investments.

Portfolio Beta

A measurement of the volatility, or systematic risk, of a portfolio of assets compared to the market as a whole.

Larger Number

A numerical quantity that is greater in value when compared to another number.