"Dumping" is an accusation that is often made against foreign companies. Japanese automobile companies, for example, have been accused of this practice.

Required

Go to the library and find out the following:

1. What is dumping?

2. Why do international trade agreements usually prohibit dumping? Do you agree that its prohibition is good for the U.S. consumer? Explain.

3. Explain how the relevant costing principles learned in this chapter relate to dumping.

4. Provide several examples of companies accused of dumping. See if you can determine the outcome of an accusation made against one company. Why do you suppose that international companies pursue dumping even though it is prohibited? What are the ethical implications?

Several of the websites for major airlines contain news of current special fares and flights. A decision to run a brief "fare special" is an example of a tactical decision. Check one or more of these websites for recent examples of fare specials and write a brief paper discussing the types of cost and revenue information that would go into making this type of tactical decision.

Part 2- Cybercase

Compute after-tax cash flows: the income statement method and the decomposition method. Although depreciation is not a cash flow, it does have cash-flow implications because tax laws allow depreciation to be deducted in computing taxable income. Straight- line and double-declining-balance depreciation both produce the same total depreciation deductions over the life of the depreciated asset. Because the latter method accelerates depreciation, however, it would be preferred.

Describe capital investment in the advanced manufacturing environment.

Capital investment in the advanced manufacturing environment is affected by the way in which inputs are determined. Much greater attention must be paid to the investment outlays because peripheral items can require substantial resources. Furthermore, in assessing benefits, intangible items such as quality and maintaining competitive position can be deciding factors. Choice of the required rate of return is also critical. The tendency of firms to use required rates of return that are much greater than the cost of capital should be discontinued. Also, since the salvage value of an automated system can be considerable, it should be estimated and included in the analysis.