Brazils_gol - B O P art 6:r I nternaticnal uslress...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Part 6 ,-: r ,' Internaticnal Buslress Operarlols #s$ #9 ffi #E ?k* Esk=.EsS se?{$ 1. How can the finance function of an international business improve the firm's competitive position in the global marketplace? ?.. What actions can a firm take to minimize its global tax liability? On ethical grounds, can such actions be justified? 3. You are the CFO of a U.S. firm whose wholly owned subsidiary in Mexico manufactures com- ponent parts for your U.S. assembly operations. The subsidiary has been financed by bank bor- rowings in the United States. One of your ana- lysts told you that the Mexican peso is expected to depreciate by 30 percent against the dollar on the foreign exchange markets over the next year. What actions, if any, should you take? 4. You are the CFO of a Canadian firm that is con- sidering building a $10 million factory in Russia #'ws*ruS€#tr* = to produce milk. The investment is expected tr- produce net cash flows of $3 million each year for the next 10 vears. after which the investment will have to close down because of technological obsolescence. Scrap values will be zero. The cost of capital will be 6 percent if financing is ar- ranged through the Eurobond market. However. you have an option to finance the project by bor- rowing funds from a Russian bank at 12 percent. Analysts tell you that due to high inflation rn Russia, the Russian ruble is expected to deprecr- ate against the Canadian dollar. Analysts also rate the probability of violent revolution occur- ring in Russia within the next 10 years as high. How would you incorporate these factors into your evaluation of the investment opportunitf i \Uhat would you recommend the firm do? itiffi ffiwmmmw*k K-mm &s (j el"b"gggg l r{D,r SLoDar ) . .-s! cou Use the globalEDGErM site to complete the following exercises: 1. Tax rates in different countries can impact the
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 12/31/2009 for the course BIZ 178 taught by Professor Meford during the Fall '09 term at Berkeley.

Page1 / 2

Brazils_gol - B O P art 6:r I nternaticnal uslress...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online