Problem Assignments: Week 8
Ann Page Co. fixed costs $30,000 per year. Variable costs per unit are $17. Sales price per unit is $30.
a) What is the contribution margin of the product?
Contribution margin is unit sales pr
CHAPTER 4: PARITY CONDITIONS IN INTERNATIONAL FINANCE/CURRENCY FORECASTING
PARITY CONDITIONS IN INTERNATIONAL FINANCE
AND CURRENCY FORECASTING
This chapter emphasizes that currency prices are determined in the same way that other asset prices ar
A local market research firm has just won a contract for several thousand small projects
involving data gathering and statistical analysis. In the past, the firm has assigned each
project to a single member of its highly trained professional staff. Th
Week 9 Homework
FIN535 International Finance
1. Assuming that banks in Thailand issue a time draft on behalf of Sports Equipment Inc. and
Major Leagues Inc., would Blades receive payment for its roller blades before it delivers them?
Do the banks issuing
Week 6 Homework Questions
1. Translation exposure reflects:
a. the exposure of a firm's international contractual transactions to exchange rate
b. the exposure of a firm's local currency value to transactions between foreign
Week 8 Homework Questions
International governance is achieved by all of the following except:
a. poison pills.
b. board of directors.
c. institutional investors.
e. All of the above achieve governance.
2. Which of the follo
"Cultural Dimensions" Please respond to the following:
Evaluate the importance of MNCs having a culturally diverse board of directors and work force.
Provide one (1) example that depicts the main reasons why such factors are essential for international
Week 9 Homework Questions
1. An argument for MNCs to have a debt-intensive capital structure is:
a. they are well diversified.
b. they can reduce the chance of bankruptcy.
c. it spreads the shareholder base.
d. it forces subsidiaries to pay div
Week 4 Homework Questions
1. To force the value of the pound to appreciate against the dollar, the Federal Reserve should:
a. sell dollars for pounds in the foreign exchange market and the European Central
Bank (ECB) should sell dollars for poun
Week 2 Homework Questions
Recently, the U.S. experienced an annual balance of trade representing a _.
a. large surplus (exceeding $100 billion)
b. small surplus
c. level of zero
A high home inflation rate relative to other count
"Direct Foreign Investment (DFI)" Please respond to the following:
From the case study, examine three (3) possible benefits realized by a DFI in Thailand. Compare the
tradeoffs of investing now versus a year from now. Provide a rationale for your response
"Government Impact on Exchange Rates" Please respond to the following:
From the first case study, imagine a situation where the Thai government has decided to peg the Thai
Baht to the U.S. dollar. Predict the major effects that such a peg could have on th
"Determinants of Trade Flows and Financing International Trade" Please respond to the following:
Analyze the major effects that microeconomic and macroeconomic factors could have on the
international flow of funds between countries and the primary manner
Week 3 Homework Questions
1. The value of the Australian dollar (A$) today is $0.73. Yesterday, the value of the Australian dollar
was $0.69. The Australian dollar _ by _%.
a. depreciated; 5.80
b. depreciated; 4.00
c. appreciated; 5.80
Week 7 Homework Questions
Based on the text, it should be obvious that markets are _ in reality, and consequently,
monopolistic advantages _ be exploited.
a. perfect; may possibly
b. perfect; cannot
c. imperfect; may possibly
d. imperfect; c
"Exchange Rate and Transaction and Translation Exposure" Please respond to the following:
Analyze the major effects that relative interest and inflation rates could have on a countrys currency.
Suggest the crucial steps that a company could take in order
"Multinational Capital Structure and Optimal Capital Structure" Please respond to the following:
From the case study and your knowledge of both the cost of capital and capital structure for MNCs,
predict the likely outcome of a Blades expansion into Thail
Week 10 Homework Questions
1.Which of the following is a reason why commercial banks can facilitate international trade?
a. The exporter may not wish to accept credit risk of the importer.
b. The government may impose exchange contracts that pr
"Financing International Trade" Please respond to the following:
Compare two (2) methods that a company can use in order to finance international trade. Examine
the advantages and disadvantages of financing with a portfolio of currencies. Provide two (2)
"Forecasting Exchange Rates and Risks Associated with Transaction and Translation Exposure" Please
respond to the following:
From the first e-Activity, determine whether or not the Big Mac Index supports the theory of PPP.
Analyze the essential manner in
Week 1 Homework Questions
The commonly accepted goal of the MNC is to:
a. maximize short-term earnings.
b. maximize shareholder wealth.
c. minimize risk.
d. A and C.
e. maximize international sales.
With regard to corporate goals, an MNC i
"Transaction and Translation Exposure" Please respond to the following:
From the case study, determine whether Blades is subject to transaction, translation, or economic
exposure. Provide one (1) example of the type of exposure that supports your answer.
"Doing International Business" Please respond to the following:
From the case study and e-Activity, differentiate between the major benefits and potential pitfalls of
sourcing from Thailand for Blades after conducting your country risk assessment. Determi
What is the correctly valued offer price?
Offer price =$16
Generally, new shares will be issued only at the current stock price which will be the offer price
of new issue.
Offer price = Current value of equity / Number of shares outs
FINC2011 Tutorial 5
BMA Ch.4 Problems 5, 6, 7, 8, 18, 20, 21, 24, 25, 27
5. Company Z's earnings and dividends per share are expected to grow indefinitely
by 5% a year. If next year's dividend is $10 and the market capitalization rate is
8%, what is the c