UGM June 2019 Q37
0. International Fisher Effect suggests that a home currency will:
- A
Appreciate if the current home interest rate exceeds the current foreign interest rate
- B
Depreciate if the current home interest rate exceeds the current foreign interest rate
- C
Appreciate if the current home inflation rate exceeds the current foreign inflation rate
- D
Depreciate if the current home inflation rate exceeds the current foreign inflation rate
- Option : C
- Explanation : Feasibility Analysis: Process of determining if a business idea is viable.
A feasibility analysis is an assessment of a potential business rather than strictly a product or service idea.
If the business idea is not feasible then one should either modify or drop the same.
(a) Product/Service Feasibility: Assessment of the overall appeal of the product or service proposed.
1. Ensure that the proposed product or service is desirable and serves a need in the marketplace.
2. Determine if there is a demand for the product or service, there are two ways:
• Buying intentions survey.
• Conducting library, Internet research.
(b) Industry/Target Market Feasibility: Assessment of the overall appeal of the industry and the target market for the product or service being proposed.
(c) Organizational Feasibility: To determine whether a proposed business has sufficient management expertise, organizational competence, and resources to successfully launch its business.
1. Evaluate the ability, of its initial management team.
2. Determine whether the proposed venture has or is capable of obtaining sufficient resources to move forward.
(d) Financial Feasibility: To determine whether a proposed business is financially viable or not.
1. Calculate the total cash needed to prepare the business to make its first sale & sources of the same.
2. Estimate a proposed start-up’s potential financial performance by comparing it to similar, already established businesses.
