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In early 2016, the same Germany machinery company has interest from four prospective clients from emerging markets: Indonesia, Brazil, Russia, and South Africa. They all want to buy ten machines, but the factory can only produce ten in time. Therefore, the company has to choose only one client. Given the volatility of the domestic currencies of the four prospective clients, the CFO would like to choose the client which is least likely to cancel the order due to currency volatility. The invoice comes due on June 30, 2016. According to volatility alone, which prospective client would be most likely to cancel the order? A) RussiaB) BrazilC) IndonesiaD) South Africa

Sagot :

The nation most likely to revoke this order is Indonesia. Its great volatility is the cause of this. , the same Germany machinery company has interest from four prospective clients from emerging markets

We can see from the accompanying volatility chart that Indonesia has the highest possibility of the order being canceled. The Indonesian currency has been found to be highly volatile, and this volatility will have a significant impact on trade. The price of imports would increase if a country's currency was weaker.It manufactures durable items such turbines, engines, gearboxes, machine tools for building and manufacturing, automation, and material handling equipment. German mechanical engineering companies tend to be medium-sized, have a wide range of products, and have a strong export emphasis.

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