Your Firm Has Just Tendered for a Contract in Japan

question 14

Essay

Your firm has just tendered for a contract in Japan. You won't know for 3 months whether you get the contract but if you do, you will receive a payment of 10 million yen a year from now. You are worried that if the yen declines in value, the dollar value of this payment will be less than you expect and the project could even show a loss. Discuss the possible ways that you could protect the firm against a decline in the value of the yen. Illustrate the possible outcomes if you do get the contract and if you don't.

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Definitions:

Business Environments

The combination of internal and external factors that influence a company's operating situation.

Offices

Designated workspaces within a building where administrative or professional activities are conducted.

Presence Technology

A type of software or system that allows people to locate and identify a computing device user's current status and location, often used in instant messaging applications.

Cloud Computing

The delivery of computing services—such as servers, storage, databases, networking, software—over the internet ("the cloud") to offer faster innovation, flexible resources, and economies of scale.