448 Part 4: Long-Term Asset and Liability Management SMALL BUSINESS DILEMMA Multinational Capital Budgeting by the Sports Exports Company Jim Logan, owner of the Sports Exports Company, has retail stores. The distributor likely would want to pay been pleased with his success in the United Kingdom for the product each month in Mexican pesos. Logan He began his business by producing footballs and would need to hire one full-time employee in the exporting them to the United Kingdom. While United States to produce the footballs. He would also American-style football is still not nearly as popular need to lease one warehouse. in the United Kingdom as it is in the United States, the capital budgeting steps that would be 1. Describe his firm controls the market in the United Kingdom. necessary to determine whether this proposed project is Logan is considering an application of the same busi- feasible, as related to this specific situation. ness in Mexico. He would produce the footballs in the United States and export them to a distributor of sport- 2. Explain why there is uncertainty surrounding the ing goods in Mexico, who would sell the footballs to cash flows of this project