Analyze the following.

a. How does the international price elasticity of demand for exports affect profitability of an investment?

b. Let us say, we borrow 90% of a capital budgeting project costing $100 million. That means we use equity of $10 million. We also need additional labor to set up the project. What is the total cost of this investment?

c. We invest in a foreign land. The host government provides a subsidy for us of $30 million in equivalent foreign money. What is our investment?