2-2-a: How would a relatively high home inflation rate affect the home country’s current account‚ other things being equal? A. A high home inflation rate could cause a current account a deficit since it results to decrease exports and increase imports. 2-12-a: U.S.-based MNCs commonly invest in foreign securities. Assume that the dollar is presently weak and is expected to strengthen over time. How will these expectations affect the tendency of U.S. investors to invest in foreign securities
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| | | | | | | | | | | | | | | | | | | | 1 | An American Mutual Fund company invested USD 2‚000‚000 in BSE on 31.12.2007 when the BSE sensex was 20‚000 points. On 31.03.2008‚ the company observed that its portfolio depreciated by 23% when the BSE sensex touched 16‚000 points. If the company decided to withdraw the investment from India‚ what would be the net increase or decrease in their investment in terms of dollar? | | | | | | | | | | | | $/Rs spot rates are
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Phase 2: 2016 - 2018 Synopsis You selected Pursue Big-Box Distribution‚ Expand Online Presence‚ and Develop a Private-Label Product and declined no opportunities . Below is a synopsis of how each opportunity affected your Working Capital and Cash Flow. Pursue Big-Box Distribution Taking on Mega- Mart Inc. as a customer resulted in impressive top-line growth but the company’s EBIT margin declined. Revenue’16’17’1805K10K $7‚100 Opportunity EBIT’16’17’180250500 Opportunity Free Cash Flow’16’17’180-2K-1K
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1. GLBA repealed parts of an act. Name the act and explain why that was significant for financial institutions and insurance companies. Glass-Steagall Act. It was significant for both financial institutions and insurance companies because now they can merge together. 2. What is another name for obtaining information under false pretenses and what does that have to do with GLBA? What is an example of a safeguard pertinent to this requirement? Pretexting. GLBA provides limited privacy protection against
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Midterm – John Doe Executive summary Diva shoes is an international shoes company that is experiencing rapid growth. Due to this rapid growth‚ the company never established a robust hedging strategy to protect itself against fluctuations of the multiple currencies it engages with. This situation became more severe in Japan. The company’s growth in Japan exceeded all expectations‚ and unlike other countries in which the company conducted business (Italy for example) the company had almost no expenses
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Financial Management Assignment (10 Sep‚ 2012) ------------------------------------------------- Ch. 5: 1 (a-e)‚ 4‚ 5‚ 7‚ 10‚ 11‚ 12‚ 15 ------------------------------------------------- FM1 Takumi KAWAI‚ Pham NGUYEN‚ Yang CHEN‚ Bi CHAO #1 a. What is the payback period on each of the following projects? Payback period: A 3 years‚ B 2 years‚ C 3years b. Given that you wish to use the payback rule with a cutoff period of two years‚ which projects would you accept? “B” Only B meetsthe
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Consider a project to produce solar water heaters. It requires a $10 million investment and offers a level after-tax cash flow of $1.75 million per year for 10 years. The opportunity cost of capital is 12 percent‚ which reflects the project’s business risk. Suppose the project is financed with $5 million of debt and $5 million of equity. The interest rate is 8 percent and the marginal tax rate is 35 percent. The debt will be paid off in equal annual installments
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Cost of Capital The required return necessary to make a capital budgeting project‚ such as building a new factory‚ worthwhile. Cost of capital includes the cost of debt and the cost of equity. AW´s Cost of Equity Capital RS = RF + β x (RM - RF) AW´s Cost of Capital of All Equity RS = R0 + B/S (1 – t c) (R0 – RB) Cost of Equity Capital for WWE´s Widget Venture RS = R0 + B/S (1 – t c) (R0 – RB) RWACC for WWE´s Widget Venture RWACC = B/S +B RB (1 – t c) + S/S +B RS APV Taking into
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Section 1 Study Questions (9.0 points) Answer each question fully. Complete sentences are not necessary. Lesson 1 (3.0 points) 1. Name at least two things financial planning could help you do. (0.5 points) save money‚ make a budget‚ understand taxes 2. What is trade? (0.5 points) the exchange of things of value 3. What is a service? (0.5 points) something of value a person can do of others 4. Name one of the three functions of money. (0.5 points) store of value measure the
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Chapter 04 Long-Term Financial Planning and Growth Multiple Choice Questions 1. Phil is working on a financial plan for the next three years. This time period is referred to as which one of the following? A. financial range B. planning horizon C. planning agenda D. short-run E. current financing period 2. Atlas Industries combines the smaller investment proposals from each operational unit into a single project for planning purposes. This process is referred to as which one
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