CHAPTER 17 Capital Budgeting for the Multinational Corporation EASY (definitional) 17.1 The _______ is defined as the present value of future cash flows discounted at the project’s cost of capital minus the initial net cash outlay for the project. a) net present value b) equity-adjusted present value c) cost of capital d) value additive principle Ans: a Section: Net present value Level: Easy 17.2 The most desirable property of the NPV criterion is that it evaluates a) investments
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own aircraft. The 10-year deal‚ that required no equity investment from either side‚ is more significant than a simple code share because it allows the two companies to: Co-operate on scheduling of flights Ticket pricing To jointly sell tickets between Australia and Dubai Other synergies from which customers benefit are: Sharing airport lounges Linking frequent flyer programs – a key attraction for both Qantas’s 8.6 million and Emirates 5.7 million loyalty members. The synergies will benefit
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“The benefits of Transnational Corporations (TNCs) operating in Less Developed Countries outweigh the negative impacts.” How far would you agree with this statement? A transnational corporation (TNC) is a firm that has the power to coordinate and control operations in more than one country‚ even if it does not own them. There has been a movement of industrial activity from Developed Countries (DCs) to Less Developed Countries‚ due to the lower production costs in LDCs‚ allowing TNCs to maximize profits
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UNITED NATIONS New York and Geneva‚ 2006 PART II Case studies Features and impacts of the internationalization of R&D by transnational corporations: China’s case Zhou Yuan1 In recent years‚ an increasing number of TNCs have established R&D laboratories and increased their R&D spending in China. This paper suggests that this internationalization of R&D by TNCs can benefit developing countries such as China‚ although it cannot automatically upgrade the local S&T capabilities. Therefore
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Sustainable Development: The Role of Multinational Corporations Gary Quinlivan‚ PhD Saint Vincent College The economic role of multinational corporations (MNCs) is simply to channel physical and financial capital to countries with capital shortages. As a consequence‚ wealth is created‚ which yields new jobs directly and through “crowding-in” effects. In addition‚ new tax revenues arise from MNC generated income‚ allowing developing countries to improve their infrastructures and to strengthen
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ENTRY STRATEGIES: STRATEGIC ALLIANCES I. INTRODUCTION The past two decades has been an era of global evolution‚ in which the globalisation of markets‚ the convergence of and rapid shifts in technologies‚ and the breakdown of many traditional industry boundaries‚ has rendered strategic alliances a competitive necessity (Ohmae‚ 1989). A single firm is unlikely to possess all the resources and capabilities to achieve global competitiveness. Therefore‚ collaboration among organisations that possess
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from one country to the next • The growing occurrence of mergers‚ acquisitions‚ & strategic alliances Opinions on Globalization: • It has ‘enfeebled the state’/undermines or limits the sovereignty of countries National governments are not able to independently decide their exchange rate‚ interest rates‚ investment. Output affected (negatively) by market forces Multinational Corporations (transnational) MNCs are the agents of increased international interdependence They dominate all underlying
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mentioned above about some factors that caused the decline of Multinational Corporation‚ and here is the explanation of those factors: • Technical-Efficiency Forces The Technical-Efficiency Forces has two possibilities First‚ the decline of the corporation came from its inabilities to achieve and to maintain economic efficiencies in market transactions. When the economic environments no longer support efficient operations of the corporation‚ it can find other ecological slots or reduce their operations
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Name: Course Name: Course Instructor: Date of Submission: Chrysler Fiat Strategic Alliance The Chrysler Company was founded by Walter Chrysler on June 6‚ 1925‚ when the Maxwell Motor Company (est. 1904) was re-organized into the Chrysler Corporation. Later Fiat S.P.A was merged into the company following a board approval and become Fiat Chrysler Automobiles NV (FCA). FCA became the owner of the Fiat Group‚ the holding company that consists most of the company’s brands‚ like Ferrari‚ Maserati
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Successful Strategic Alliances: How to prepare for an alliance Andrew Brown and Phil Hogg‚ Special to Financial Post | May 16‚ 2012 4:42 PM In this installment‚ we turn our attention to translating your alliance from a boardroom concept into real world implementation. As the driving force behind an alliance‚ here are specific actions you need to take to prepare for your alliance’s success: Assign an Alliance Champion. The alliance champion ultimately owns the success of the alliance. As a result
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