Assignment 2Copper Specialist Ltd (incorporated in USA) was established by Dr Wi
Assignment 2Copper Specialist Ltd (incorporated in USA) was established by Dr William Blake (with a PhD degree in Materials Science) 20 years ago. The company specializes in using copper as the material for plumbing, heating, gas and fire sprinkler pipework systems.The sales of the company is increasing at a steady rate over the years as copper products offer the following benefits:• Copper has been conveying water for thousands of years. Reliable and time proven:• It can withstand extreme high and low temperatures and pressures and can be exposed to the UV rays, temperature and oxygen of outside environments. High resistance:• Copper tube is used in many products and services: drinking water, home heating (traditional and radiant), gas, medical gases, solar energy systems, fire sprinklers, air conditioning systems Versatile:• Thanks to its excellent thermal conductivity, copper pipes are the best material to exchange heat (or cold fluids). That's why the most efficient radiant heating have circuits in copper tube. Energy saving:• In cases of demolition or renovation, copper tube can be 100% recycled without loss of performance; so, the volume of waste at landfill is not increased and the mine resources are not further exploited Recyclable:• Copper vs. COVID-19:Research has shown that the novel coronavirus, responsible for the COVID-19 pandemic, can survive for days on glass, plastic, and stainless steel surfaces, but dies within hours on a copper surface as copper has antimicrobial properties that are effective against a wide variety of disease-causing organisms.Because of COVID-19, the company sees a chance of entering medical equipment market and is working with Medical Products Ltd to produce medical equipment in coming 12 months which hopefully will boost the sales and diversify the customer base of the company.This year marks the 20th annual anniversary and the company has grown from a small sized family business to a multi-national company with sales all over the world with latest annual sales at USD120 million.Its main markets are in USA and Europe and the % of sales in USD, euro and other currencies are 60%, 35% and 5% respectively.The annual purchases are USD60 million with 90% in USD and 10% in euro.As copper is the main material in the finished products and its monthly consumption is 400 metric tons.The company's main manufacturing base is in China with manufacturing cost breakdown as shown below.The headquarter is at Hong Kong and has an annual cost of about HKD40 million.You have been recently employed by this company as treasurer and the CFO, Mr. Simon David has told you that he is worried about the increased risk faced by the company due to recent volatility of the financial markets which exhibit huge swings in different directions. He would like to protect the underlying profit before tax currently at 12% on sales earned by the company for at least coming 12 months.As a result, he has asked you to prepare a report to address the following points.1.Briefly explain the risk management process to tackle the above situation.2.What kind of currency and commodity risks are currently faced by the company and what is their potential impact?3.What actions should be taken and please state your rationales behind for supporting such actions.4.Please state one potential new business risk faced by the company and any appropriate action that needs to be done by the company. Requirements: 1500 words   |   .doc file

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