Tutorial 8: Answers
1. Define and explain the Payback Period Method, the Net Present Value (NPV)
Method and the Internal Rate of Return (IRR) Method. In your discussion state the
criteria for accepting or rejecting an investment under each rule.
Tutorial 2: Answers
Question1: Explain the concept of time value of money? Discuss its important in
The time value of the money is based on the concept that a dollar today is worth more
than a dollar to be received at some future date. In
Tutorial 9 Answers
1. Why is capital budgeting analysis so important to the firm?
ANSWER: Capital investments involve large expenditures and the decisions are difficult
to reverse, and have long-term effects. Thus, capital budgeting decisions require care
Q1A. Explain how the theory of comparative advantage relates to the need for
The theory of comparative advantage relates to the need for international
business because it suggests that each country should use its comparative
Tutorial Answers 6
1. Transaction Exposure. Fischer Inc., exports products from Florida to Europe. It
obtains supplies and borrows funds locally. How would appreciation of the euro
likely affect its net cash flows? Why?
ANSWER: Fischer Inc. should benefit
Tutorial 10 Answers
1. What are the main differences between debt and equity? What are hybrids?
a. The main difference between debt and equity are:
Debt has a maturity date (i.e. need to be repaid) whereas equity has no maturity.
Debt involves pay
There are some objectives that central banks need to achieve, the first one is price
stability, which is a monetary policy objective, it is the most commonly one, which is
the inflation level, the domestic purchasing power of the currency. These central
US Dollar Debt of Emerging Market Firms
Sasha Kofanova, Aaron Walker and Eden Hatzvi*
US dollar-denominated borrowings by emerging market (EM) corporations have increased
rapidly in recent years, raising concerns about possible currency mismatch risk. Thi