Financial Report

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University of Windsor
Odette School of Business
Master of Management

0478-612-01/02
Corporate Finance in a Global Perspective

Assignment #1

Dr. Keith C.K. CheungDue: Feb. 26, 2013

Student Name:___________________________________________
(Print)

Student ID Number:_____________________________________

INSTRUCTIONS

1. Assignment is collected in class. No late assignment can be accepted. 2. Detailed solution will be found on the CLEW at 5:00 pm on Feb. 26 3. Part A contains 50 multiple-choice questions. You have to attempt all questions. Leave your answers in the space provided. 4. Each correct response is worth one point. Make an educated guess if needed. 5. Part B contains 4 discussion questions. Again attempt all questions. 6. Each answer has a maximum score of five points. Quality, not quantity, matters. You must clearly support your arguments to earn credits. 7. With a perfect score of 70 points, this assignment is worth 100% of the overall grade.

KEEP THE QUESTION PAPER FOR EXAM REVIEW

Part A: Multiple-Choice Questions: are designed to test general understanding of a variety of core concepts, and their specific applications

1.In a given year, Vodafone, a British company from the communication industry has US$247,850m foreign assets out of total assets of US$258,626m. Among the total sales of US$62,494m, the foreign sales (outside United Kingdom) count for US$53,307m. There are 45,981 overseas employees working in 70 countries while the company has a total of 198 affiliates with 57,378 workers. Find the trans-nationality index (TNI) for this multinational corporation. ____

A) 48.7
B) 53.2
C) 79.0
D) 87.1

(The following information relates to Questions 2 and 3)

Alternative outputs from one year of labor input are given as below. | CD Players| Computers|
Canada (one person working one year)| 40| 40|
Sweden (one person working one year)| 20| 10|

2.Which of the following is true?
____
A) Sweden has an absolute advantage in the production of computer B) Canada should export CD players to Sweden and Sweden should export computers to Canada C) The opportunity cost of a computer in Sweden is two CD players D) The opportunity cost of a CD player in Canada is two computers

3.If Sweden and Canada decide to specialize according to the law of comparative advantage and trade with each other, then ____
A) The trade agreement will be somewhere between half a computer for one CD player and two computers for one CD player B) Sweden will benefit from trading with Canada, but Canada will not benefit from trading with Sweden C) Sweden will specialize in the production of computers and Canada will specialize in the production of CD players D) None of the above

4.Major differences between international and domestic financial management include ____
A) Corporate governance
B) Foreign exchange risk
C) Different business practices
D) All of the above

5.When a nation’s products are first introduced into global markets, that particular country has a competitive advantage that is not easily overcome in the short-term. This expresses the basis of the ____ of international trade. ____

A) Product life cycle theory
B) Gravity theory
C) Comparative advantage theory
D) New trade theory

6.Which of the following is not – by definition – a multinational enterprise? ____
A) A firm that only exports products or import raw material B) A foreign joint venture
C) Acquisition of controlling interest in a foreign company D) None of the above

7.Assume that a bank’s bid rate on Swiss francs is $0.45 and its ask rate is $0.47. The bid-ask percentage spread is ____
A) 4.44%
B) 4.26%
C) 4.17%
D) 4.03%
Hint:(Ask price – Bid price)/Ask price

8.A Japanese yen (Y) is worth $0.008, and a Fijian dollar (F$) is worth $0.59. What...
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