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Hindustan is considering a JV with an MNC. The JV will buy input unit from the MNC and manufacture logic unit (maxi plant), output unit
Hindustan is considering a JV with an MNC. The JV will buy input unit from the MNC and manufacture logic unit (maxi plant), output unit (maxi plant) and do final assembly (maxi plant) in India. Hindustan has negotiated with the MNC to buy input unit for $800 per unit'. Assuming that the transportation cost is 5% for shipping anything to India and the tariff rate is 40 % for any imported component and unit. Answer the following questions: Refer to the tables in FINS manual. What will be the JV's total manufacturing costs for each microanalyzer? Assuming that the price to customer is $6000, and administrative and other costs are $1000 for each microanalyzer. What will be the JV's income before tax for each microanalyzer? Assuming that the JV has 50/50 ownership, how much money per unit of microanalyzer that the MNC can make from this deal (before income tax)
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