Week6_Finance_2-13.txt - Profit Increase or Decrease Cost...

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Profit Increase or Decrease: Cost of Goods Sold Generally Accepted Accounting Principles (GAAP) / International Financial Reporting Standards (IFRS) Control/Ownership Greenfield Brownfield Acquisition The Affect of a Different Currency on the Investment: - currency risks -> non-convertibility -> inability to repatriate -> fluctuations -> interest rates -> more complex financing issues -> hedging (risk-mitigating vehicle) -> swaps -> option: pay now or later? -> futures Transfer Pricing: - tax reasons -> "a desire to present an appearance of low profits to avoid nationalist adverse reaction against the company" -> technology payments typically highly scrutinized -> currency controls which affect one form of repatriation more than another - from a developing nation perspective -> as a means to deal with large MNC
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