Discussion on whether or not it would be more ethical to invest the money in USA The decision to invest in USA hinges

upon two important factor, which are profitability and risk. The risks like political risk, exposure transaction risk, interest rate risk, operating risk and translation risk are manageable quite well in USA in comparison to India and China. USA can manage these risks very efficiently. Despite these apparent advantages, there are 2 very important factors which are labor and infrastructure (Baert, 2012). The manufactures of the high end semiconductor products need especially skilled laborers. USA has the ability supply such highly skilled laborers but the cost of the laborers is almost ten times in USA in comparison to China. Apart from that USA also do not have the infrastructure to support the manufacture of such high end devices on such a large scale. In order to support the manufacture of such high end devices massive support are needed starting from the suppliers to the distributors. USA have the capacity to provide the necessary infrastructure but here again the cost that would add up in maintaining such a large infrastructure is astronomical. Apart from these reasons, there are various other factors starting from GDP growth rate to exchange rate controls. The GDP growth rate of USA is very disappointing in comparison to countries like India and China. This also indicates that in the coming months the market is not going to rebound back any quickly. So the sales of the high end GPS devices may not pick up the required speed and volume in order to reach the breakeven points quickly. The use of GPS devices are related to cell phones, cars. USA has witnessed its hay days of car sales and cell phone sales. The market has almost become saturated now. India and China represent the unsaturated market for both mobile and cars. The decreased cost of manufacturing and the decreased cost of software programming present the ability to decrease the cost of the goods sold (Coveney & Highfield, 2007). This benefit can be reaped only if the jobs are sourced from India or China, but not from USA. If the money is invested in USA, then the company will not be able to gain the risk free gain from hedging.

Through hedging the company can decrease the cost of investment. The cost of investment can decrease considerably if the company decides to hedge in the forward market. The calculations indicate that through hedging the company can set to gain almost $4 million to $5 million. Since the main motto of the company is to take advantage of the cost benefits as well as reduce the risks, India and China give the company a much better option to do so. Whereas USA fails to provide both cost benefits as well as reduced risk benefits. So considering that most of the facts and figures points in favor India and China more than USA, so investing in USA is not an ethical decision.

Reference: Baert, P. (2012). Social theory in the 20th century. New York, New York University Press. Coveney, P. & Highfield, R. (2007). Frontiers of complexity. London, Faber & Faber Ltd.