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MGMT1101 Memo

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Memo form boss: The company is considering establishing a plant in Brazil to produce cars for the local Brazilian market. Would you recommend the company’s investment in the country, given Brazil’s economic indicators? Why/why not? (Background reading: pp. 342-345)

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MGMT1101 Memo
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Economy Macroeconomics Economics Unemployment Inflation Recession Economy of Brazil Brazil Economic history of Brazil Economy of Hungary
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Topics this document covers:
Economy Macroeconomics Economics Unemployment Inflation Recession Economy of Brazil Brazil Economic history of Brazil Economy of Hungary
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It is the fifth’s largest country, with a significant amount of potential customers as well as the advantage of a substantial amount of local factories already in existence, meaning less tax on imports would be payed as most of the engineering work is done in the host country. However, after considering key indicators such as economic growth, inflation, unemployment, it is difficult to recommend establishing automotive manufacturing plant in Brazil. Brazil’s lack of economic growth would be significant concern for Audi, if we are to commit to a long-term investment in the country. The nation is entering its 5th quarter of recession, the worst recession in thirty years because of their reliance on commodities. (Tradingeconomics.com, 2016) The recent decrease in commodity prices exposed the Brazil economy, ...
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