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Scenario 9.1 Use the Following to Answer the Questions

question 169

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Scenario 9.1
Use the following to answer the questions.
Harley-Davidson Motors manufactures all of its motorcycles in the U.S. at one of four sites. With a large number of its bikes sold in markets all around the world, it still retains the manufacturing close to the headquarters for several reasons, one being that its management wants to keep close watch on the quality of its products. However, for all the accessories, apparel, and other riding gear, Harley-Davidson contracts out to other manufacturers to produce the items with the Harley name and logo. Some of these items, particularly the apparel, are made in China. Lately, some members of the Harley Owners' Group (HOG) have been complaining to the company about this practice, citing that "everything Harley should be made in America. "
Refer to Scenario 9.1. If Harley-Davidson were to suddenly find its inventory building up in Japan, it might reduce inventory by selling the bikes at below cost prices. This practice is known as

Definitions:

Semiannual Interest

Interest that is calculated and paid twice a year, often used in bond markets to denote the interest payments made to bondholders.

Ask Price

The lowest price a seller is willing to accept for a security in the financial markets.

Invoice Price

The price that appears on the invoice from the manufacturer to the dealer, often not reflecting the actual price a consumer pays.

Coupon Bond

A bond that pays the holder a fixed interest rate (coupon payment) over the bond's lifetime, in addition to returning the principal at maturity.