WAVES Inc

Subject:BusinessPrice:2.84 Bought7

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WAVES Inc. is a US-based firm that specializes in the manufacturing of high-end surfboards. They are debating whether to continue exporting to the UK or possibly licensing the technology to a London firm that has expressed some interest in manufacturing the product in the UK. Currently, Waves return on investment from their domestic market is 35% with a net profit of $5 million from $20 million in sales.  Labor is roughly 50% of total expenses and 20% cheaper in the UK than the US. Costs other than labor in the UK are roughly same as US.  Should WAVES license or continue to export? If they license, what should the royalty rate be?  (Make any assumptions but list them)