Scenario: Jeans, Unlimited
Jeans, Unlimited produces clothing for young adults. It designs its clothes at its New York headquarters, and produces them at facilities in two Southeast Asian countries. The company recently received negative press after one of its facilities was found using questionable, albeit legal, labor practices including employing child labor and operating in a manner that damages the environment.
-Jeans, Unlimited has designed a new line of accessories and must build a new facility to produce them. To avoid paying tariffs when importing raw materials for processing and when exporting finished goods, the company should consider locating its assembly plant in a(n) ________.

Question

Quizplus · Accepted Answer

By locating its assembly plant in an export processing zone, Jeans, Unlimited can avoid paying tariffs when importing raw materials and when exporting finished goods. Export processing zones are designated areas that provide special economic incentives, including exemptions from certain taxes and tariffs, to encourage foreign investment and promote exports. This would allow the company to produce its new line of accessories at a lower cost and potentially increase its profit margins. However, the company should ensure that the new facility does not employ child labor or engage in environmentally damaging practices to avoid negative press in the future.

Scenario: Jeans, Unlimited Jeans, Unlimited Produces Clothing for Young Adults. It Designs Its