Question 1: Canada Exporters Limited is considering the export of 5,000 units of soccer balls to Qatar. The customer is Gulf Sports located in Doha, Qatar. You have been asked to analyze the feasibility of the export and have been provided with the following information. Cost of product per unit will be $5, export packing cost will be $120, labelling, marking & strapping cost will be $170 in total; freight to seaport will be $180, unloading charges will be $75, terminal charges will be $75, loading vessel charges will be $180, ocean freight charges will be $250. The company wants to have a minimum profit of 10% and the agents in Qatar charges 5% commission. Qatar is a rapidly growing economy and the per capita income is one of the highest in the world. The foreign exchange rate is very stable and inflation is well within control. A tax of 5% similar to GST is applied. There are no local manufacturers that produce a similar quality product. However, many foreign manufacturers of soccer balls are present in the market and products of similar quality are readily available in the market. The price of a similar soccer ball in Qatar at present is $6.00. Customers are price sensitive and like to have a good bargain. Distribution channels are accessible and margins are stable at 8% for the wholesaler and 15% for the retailer. a. Prepare an Export costing sheet if the term of the contract is CFR Doha. [6 Marks] b. Based on all the information available to you, do you feel that Canada Export should start exporting to Qatar? [4 Marks] Question 2: Khana Khazana Restaurant needs $150,000 over the next 180 days to finance an import. The company has $300,000 worth of inventories. Determine the best financing alternatives from the following two options. Question 1: Canada Exporters Limited is considering the export of 5,000 units of soccer balls to Qatar. The customer is Gulf Sports located in Doha, Qatar. You have been asked to analyze the feasibility of the export and have been provided with the following information. Cost of product per unit will be $5, export packing cost will be $120, labelling, marking & strapping cost will be $170 in total; freight to seaport will be $180, unloading charges will be $75, terminal charges will be $75, loading vessel charges will be $180, ocean freight charges will be $250. The company wants to have a minimum profit of 10% and the agents in Qatar charges 5% commission. Qatar is a rapidly growing economy and the per capita income is one of the highest in the world. The foreign exchange rate is very stable and inflation is well within control. A tax of 5% similar to GST is applied. There are no local manufacturers that produce a similar quality product. However, many foreign manufacturers of soccer balls are present in the market and products of similar quality are readily available in the market. The price of a similar soccer ball in Qatar at present is $6.00. Customers are price sensitive and like to have a good bargain. Distribution channels are accessible and margins are stable at 8% for the wholesaler and 15% for the retailer. a. Prepare an Export costing sheet if the term of the contract is CFR Doha. [6 Marks] b. Based on all the information available to you, do you feel that Canada Export should start exporting to Qatar? [4 Marks] Question 2: Khana Khazana Restaurant needs $150,000 over the next 180 days to finance an import. The company has $300,000 worth of inventories. Determine the best financing alternatives from the following two options
