Chapter_01 - Problem 1.6 Luzon Industries Consolidated...

Unformatted text preview: Problem 1.6 Luzon Industries' Consolidated Results US Parent Brazilian German Chinese Company Subsidiary Subsidiary Subsidiary Business Performance (000s) (US$) (reais, R$) (euros, €) (yuan, Y) Earnings before taxes, EBT (local currency) 4,500.00 6,250.00 4,500.00 2,500.00 Less corporate income taxes 35% (1,575.00) 25% (1,562.50) 40% (1,800.00) 30% (750.00) Net profits of individual subsidiary 2,925.00 4,687.50 2,700.00 1,750.00 Avg exchange rate for the period (fc/$)------ 1.8000 0.7018 7.7500 Net profits of individual subsidiary (US$) $2,925.00 $2,604.17 $3,847.25 $225.81 Consolidated profits (total across units) $9,602.22 Total diluted shares outstanding (000s) 650.00 a. Consolidated earnings per share (EPS) $14.77 b. Proportion of total profits originating by country 30.5% 27.1% 40.1% 2.4% c. Proportion of total profits originating from outside the United States 69.5% Problems 6 through 10 are based on Luzon Industries. Luzon is a U.S.-based multinational manufacturing firm, with wholly owned subsidiaries in Brazil, Problems 6 through 10 are based on Luzon Industries....
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