Oman Plastics, a well know manufacturer of soft goods, imports raw material from Africa, and exports its products to countries in Africa. It has licensing and franchising arrangements in the Middle East and has subsidiaries in two Asian countries

. 1. The management feels that franchising arrangements are better for the company as compared to licensing. Do you agree?

2. What kind of cash flows would one expect to see between Oman Plastics and these three regions Africa, Middle East, Asia ?

3. What is the level of risk Oman Plastics is likely to experience from the three regions, Africa, Middle East and Asia?