2 Explain why there is uncertainty surrounding the cash flows of this project. Jim Logan, owner of...
Question:
2 Explain why there is uncertainty surrounding the cash flows of this project.
Jim Logan, owner of the Sports Exports Company (Ireland), has been pleased with his success in the United Kingdom. He began his business by producing basketballs and exporting them to the United Kingdom. While American-style basketball is still not nearly as popular in the United Kingdom as it is in the United States, his firm controls the market in the United Kingdom. Jim is considering an application of the same business in the US. He would produce the basketballs in Ireland and export them to a distributor of sporting goods in the US, who would sell the basketballs to retail stores. The distributor would likely want to pay for the product each month in dollars.
Jim would need to hire one full-time employee in Ireland to produce the basketballs.
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