Homework Problems for Chapters 2 and 3
Briefly explain how changes in various economic factors affect the U.S. current account
The current account balance represents a summary of the flow of funds between one specified
country and all other count
1. What is the free cash flow for 2014?
EBIT (1-tax rate)
NOPAT: $502,640 (1-0.4)
NOPAT: $301, 584
Total Net Operation Capital: $2,705,520
Net Investment in Operating Capital: $447,888
Free Cash Flow: (-146,304)
2. Suppose Congres
As a financial manager researching investments for my client that align with its investment goals
would be The Coca Cola Company. The Coca Cola Company has been around for years and
everyone enjoys a Coke or a Coke product.
1. Provide a rationale for the
Pharmaceuticals Inc. is a publicly traded company in the United States of America in the
biopharmaceutical industry. The company is devoted to discover, develop, and commercialize small
molecule drugs that are useful in treating disorders in the central n
Due in Week 3 and worth 30 points
The following data consists of the actual time used and potential (the best time possible for this review
process) to complete each step in the review process. The actual times are based on the review of 30
Week 6 Homework
Transaction versus Economic Exposure. Compare and contrast transaction exposure and
economic exposure. Why would an MNC consider examining only its net cash flows in
each currency when assessing its transaction exposure?
Homework Problems for Chapters 4 and 5
Speculation on Expected Exchange Rates. Kurnick Co. expects that the pound will
depreciate from $1.70 to $1.68 in one year. It has no money to invest, but it could borrow
money to invest. It has been approved by a ba
Assignment 1: MNC Enters China
Due Week 8 and worth 300 points
Select one (1) MNC that does not currently do business in China. Next, consider the steps that
the company should consider in determining the feasibility of entering the Chinese market and
Week 7 Homework
Homework Problems for Chapters 13 and 14
1) DFI Location Decision. Decko Co. is a U.S. firm with a Chinese subsidiary that
produces cell phones in China and sells them in Japan. This subsidiary pays its
wages and its rent in Chinese yuan,
Week 1 Homework Assignment:
What are typical reasons why MNCs expand internationally?
There are three theories why MNCs expand internationally are (1) the theory of comparative
advantage, (2) the imperfect markets theory, and (3) the product cycle theory.
Homework Problems for Chapters 6 and 7
Intervention Effects on Corporate Performance. Assume you have a subsidiary in Australia.
The subsidiary sells mobile homes to local consumers in Australia, who buy the homes using
mostly borrowed funds from local ba
Homework Problems for Chapters 15 and 16
Feasibility of a Divestiture. Merton Inc. has a subsidiary in Bulgaria that it fully finances
with its own equity. Last week, a firm offered to buy the subsidiary from Merton Inc. for
$60 million in cash and the of
Homework Problems for Chapters 17 and 18
Cost of Capital. An MNC has total assets of $100 million and debt of $20 million. The
firms before-tax cost of debt is 12 percent, and its cost of financing with equity is 15
percent. The MNC has a corporate tax ra
Homework Problems for Chapters 19, 20, and 21
What organization could Blades contact in order to insure its sales to the Thai retailers?
What type of insurance do these organizations provide?
I would recommend Blades contact Brownrigg Company LTD for expo
1(a). Its 2014 dividend payment is set to force dividends to grow at the long-run growth rate in
Dividends would grow at 8%
2014 dividends 2.808 million.
1(b). It continues the 2013 dividend payout ratio.
2013 payout ratio- 0.27