International Financial Management

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Does any currency exchange rate risk exist?

A currency exchange rate risk exists in the above transaction.


The construction process involves transaction of importing materials that are useful in the setting up of the firm.

What is a tariff?

A tariff refers to the tax that is normally levied on imports or exports in any foreign transaction taking place (Northrup, 2003).

How is it implemented and collected?

The Tariffs are collected by the government through Revenue Collection Authorities. The Revenue collection Authorities through government Acts and policies that ensure the policies and regulations are clearly followed (Kirmani & Calika, 1994).

Also respond to the vice president of business development's request for the following:

The vice president’s request for the project was aimed at making maximum utilization of the firm and minimizing the expenses that are involved in both short and long run. The realizations of NSI received in both scenarios indicate the importance of setting the firm up in relation to the realization of a balance of payment in the country. The terms of trade used in the region will affect the process as it will benefit mutually through its establishment (Jongwanich, 2007). It will be a member to the FTAA policies which will allow more transactions freely as taxes and tariffs are lifted among member countries trading in the products. The strength of the nation’s currency will be maintained through the exportation of the firm’s productivity. 

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