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1) Net gross sales for Massey-Ferguson actually change order between 1979 and 1980. disrespect this, net income and income from continuing operations both(prenominal) downslopeped sharply in 1980. Which item on the income statement was well-nigh responsible for this drop in income? Net income dropped significantly from U.S. $37 millions in 1979 to -U.S.$225.2 millions in 1980 attributed to the two fixingss. The most crucial factor was the rise in cost of goods sold. In 1980, with the influx of northwest Sea oil, the worst appreciated strongly relative to currencies in which Massey sold its products. omit of alignment between production sites and food market also consume to currency losses. As engine production was heavily gruelling in the United domain, strong British pound increased Masseys cost of goods sold from U.S.$2381.8 millions in 1979 to U.S.$2568.5 millions in 1980 and wounded the profit margin. Another factor was gritty quest valuate .From the in come statement (Exhibit 2), it illust pastured that the divert expense uprise from U.S.$128.8 millions in 1979 to U.S.$229.9 millions in 1980 despite the improvement of net sales. The risque use up rate of 1979 and 1980 had a negative impact on Masseys sales performance. The cost of short-term debt and expense travel dramatically.

High interest rate depressed the market and reduced the demand of give rise and industrial machinery which shrank the company sales. 2) why would the Canadian government activity rescue any interest in helping Massey -Ferguson refinance its debt? Looming pecuniary position generate Victor Rice and Conrad Black to commute the governments of Can ada, Ontario and the United Kingdom to inter! vene on Masseys behalf. Massey approached the Trudeau and Thatcher government for aid in June 1980. Event there was hindrance to bailing show up a privately owned multinational firm, their initiative embossed the awareness of Canadian government. The Canadian government would have interest in helping Massey refinance its debt because of the upcoming Ontario...If you want to shit a full essay, order it on our website: OrderEssay.net

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