You Run a Small Company That Manufactures Plastic Injection Molded

question 11

Essay

You run a small company that manufactures plastic injection molded pieces for the construction industry.Currently,you manufacture your product in Windsor,Ontario and a small plant in Texas.You sell your products in both Canada and the United States.You are aware that NAFTA presented your company with increased access to the American market.You want to expand,and are aware of something called the "European Union",but are unsure of what it means,whether Canada can join (or has joined)and what your firm can do to get access to this large market.You are also interested to know whether there are other "groups of countries like NAFTA or the EU" out there.
According to reports from the Canadian Embassy in Mexico,one of the major reasons for the growth of plastics and plastic products in Mexico is the increase in per capita consumption of plastic products and the substitution of parts in products such as household appliances,electronics products,vehicles,and machinery.If local production grows at a rate of five percent in the next three years,Mexico will still have to import injection moulded,extruded and blow moulded parts and packaging,as well as molds,to accommodate the substitution of metal,glass,and other materials.How does this report by the Canadian embassy in Mexico relate to the arguments in favour of lowering trade barriers within a regional trade agreement? Explain.

---

Definitions:

Holding Gains

Holding gains are the increased values of assets that a company holds, realized when the asset is sold or revalued.

FIFO Cost Flow

An inventory valuation method where the cost of the earliest goods purchased are the first to be recognized as cost of goods sold.

Net Income

This refers to the amount of money a company earns after subtracting all its expenses, taxes, and costs from its total revenue.

Ending Inventory Value

The total value of all the goods available for sale at the end of a financial period.