View the step-by-step solution to:

FINA521 International Financial Management Mid Term Exam 1. The goal of a multinational corporation (MNC) is the maximization of shareholder wealth.

I will be appreciate if I will get answers.
FINA521 International Financial Management Mid Term Exam 1. The goal of a multinational corporation (MNC) is the maximization of shareholder wealth. a. True b. False 2.Which of the following theories identifies the non-transferability of resources as a reason for international business? a. theory of comparative advantage. b. imperfect markets theory. c. product cycle theory. d. none of the above 3. In comparing exporting to direct foreign investment (DFI), an exporting operation will likely incur ____ fixed production costs and ____ transportation costs than DFI. a. higher; higher b. higher; lower c. lower; lower d. lower; higher 4. Assume that an American firm wants to engage in international business without major investment in the foreign country. Which method is least appropriate in this situation? a. International Trade b. Licensing c. Franchising d. Direct foreign investment 5.Assume that Boca Co. wants to expand its business to Japan, and wants complete control over the operations in Japan. Which method of international business is most appropriate for Boca Co? a. Joint venture b. Licensing c. Partial acquisition of existing Japanese firm d. Establishment of Japanese subsidiary 6. Assume that Live Co. has expected cash flows of $200,000 from domestic operations, SF200,000 from Swiss operations, and 150,000 euros from Italian operations at the end of the year. The Swiss franc's value and euro's value are expected to be $.83 and $1.29 respectively, at the end this year. What are the expected dollar cash flows of Live Co? a. $200,000 b. $559,500 c. $582,500 d. $393,500
Background image of page 01
7. Assume that Live Co. has expected cash flows of $200,000 from domestic operations, SF200,000 from Swiss operations, and 150,000 euros from Italian operations at the end of the year. The Swiss franc's value and euro's value are expected to be $.83 and $1.29 respectively, at the end this year. What are the expected dollar cash flows of Live Co? a. $200,000 b. $559,500 c. $582,500 d. $393,500 8.If a country's government imposes a tariff on imported goods, that country's current account balance will likely ____ (assuming no retaliation by other governments). a. Decrease b. Increase c. remain unaffected d. either A or C are possible 9.If the home currency begins to appreciate against other currencies, this should ____ the current account balance, other things equal (assume that substitutes are readily available in the countries, and that the prices charged by firms remain the same). a. Increase b. have no impact on c. Reduce d. all of the above are equally possible 10.The "J curve" effect describes: a. the continuous long-term inverse relationship between a country's current account balance and the country's growth in gross national product. b. the short-run tendency for a country's balance of trade to deteriorate even while its currency is depreciating. c. the tendency for exporters to initially reduce the price of goods when their own currency appreciates. d. the reaction of a country's currency to initially depreciate after the country's inflation rate declines. 11. The demand for U.S. exports tends to increase when: a. economic growth in foreign countries decreases. b. the currencies of foreign countries strengthen against the dollar. c. U.S. inflation rises. d. none of the above. 12. Exporting of products by one country to other countries at prices below cost is called elasticity. a. True b. False
Background image of page 02
Show entire document

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question