Assume That the Buyer in Saudi Arabia Has Made Other

question 12

Essay

Assume that the buyer in Saudi Arabia has made other large purchases in the United States and is considering consolidating all of its purchases and loading them onto one large ship, which the buyer will charter. The buyer contacts HDT and, although acknowledging its commitment to buy FAS Doha, asks how much HDT would subtract from the $172,000 per truck price if the selling terms were changed to FOB HDT's Crown Point plant. How much of a cost reduction do you think HDT should offer the buyer? Under what terms and conditions?

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Definitions:

Appreciated

An increase in the value of an asset or currency in comparison to other assets, currencies, or benchmarks.

Yen

The official currency of Japan, used as a medium of exchange in one of the world's largest economies.

Dollar Price

The cost of a good, service, or security expressed in terms of the U.S. dollar.

Import

Goods or services brought into one country from another for sale.