Mgt211 Gdb #1 solution spring 2012

Solution:



In case if income tax decreases the, the margin in decreasing income tax
will be counted as our profit. In this case when our income tax decreases
so our profit margin will increase. We can now decrease our selling cost
which will help us for a better competition in local market as well as
foreign markets and it will increase the demand of our products in both
areas.
In case if Imports taxes increase then,
As we are importing all the major components from foreign especially
from china, the increase on imports tariff will affect us as our cost of
production will be increase
If our cost of production increased, we must have to increase our selling
price
If we increase selling price, we have to bear tough competition in foreign
markets
So, in this case we are not be able to export our products in foreign
markets as the demand of our products will decrease
Being a local seller, we have to sell our major quantity in local market
for save us from more taxes, but local market can’t fulfill our margins