PAST DUE PLEASE HELP!!! CAN YOU DO IT IN 4 HOURS?

A host government may offer incentives to MNCs that consider direct foreign investment in its country. Incentives may include all of the following, with the exception of: 

 

Letters of credit: 

 

A U.S. firm is considering investment in either Canada or Mexico, but not both. It might select: 

 

MADCO, a U.S. company, exports to other countries. The company sells its accounts receivable without recourse. Factoring involves:

 

A MNC could do which of the following to make it desirable to the host government:

 

A MNC might establish a manufacturing facility in a foreign country because:

 

MNCs who want to retain liquidity may invest excess cash in:

 

A method of payment that is an unconditional promise by one party, instructing the buyer to pay the face amount upon presentation is a:

 

Assume a Canadian firm initiates direct foreign investment in the U.S. The Canadian dollar is expected to depreciate against the U.S. dollar. The C$ dollar value of earnings remitted to the parent Canadian company should:

 

A banker's acceptance:

 

A company believes that interest rates will increase in the near future and stay at higher levels. This company should borrow at a:

 

Should tax-related factors be considered in evaluating a foreign target?

 

Counterpurchase:

 

MNCs sometimes measure country risk by assigning weights to factors. Which of the following is correct:

 

The Export-Import Bank of the U.S. offers various programs, including:

 

A U.S. MNC is considering investing in Portuguese securities. The exchange rate is € = $1.33. If the euro depreciates, the effective yield on the investment will be:

 

Spain and South Africa have very different economic conditions. A MNC would reduce risk by:

 

With consignments:

 

MORIT, Inc., a U.S. corporation undertakes direct foreign investment in Brazil. The Brazilian real is expected to depreciate temporarily against the dollar. As a result, earnings remitted to MORIT will convert to fewer dollars. For this reason, MORIT may request the subsidiary to:

 

Which of the following is probably the most difficult for a MNC to value?

 

Which strategy is suggested when a company wants to to reduce risk by diversifying internationally?

 

The Jackson Corporation, a U.S. firm, establishes a subsidiary in a foreign country where it currently doesn't do any business. The present value of cash flows from this subsidiary to the parent is more sensitive to exchange rate movements when:

 

MNCs may value the same foreign target company in different ways because of:

 

Financial characteristics that should be considering in evaluating country risk include:

 

 

The annual interest rate on the Swiss franc is 4%. It is expected to appreciate 3% over the next year. Calculate the effective financing rate for a U.S. company. Show how you derive the answer.

 

Tundra, Inc. plans to make an offer for a Chinese company. The Chinese company has 50 million shares outstanding and price per share is 3 yuan. The current spot exchange rate is $1 = 6.27yuan and the estimated spot rate at the end of 6 months is 6.24. (1) Calculate the Chinese company's value in dollars based on its stock price; and (2) Calculate the value in dollars if the estimated spot rate at the end of 6 months is used? Show how you derive answers.

 

Boxton, Inc. is considering a project with an estimated return on 10%. Its capital structure consists of 60% debt and 40% equity. Its borrowing rate is 6% and cost of equity is 10%. Its tax rate is 30%. (1) Calculate Boxton's weighted averaged cost of capital; and (2) should Boxton undertake the project? Why or why not?

 

Parvis, Inc., a U.S. Company is expecting cash flows in Australian dollars of: A$1 million, AS1.5 million, and AS .5 million in years 1, 2, and 3, respectively. The forecasted exchange rates are US$1.03 year 1, US$1.04 year 2, and US$1.05 year 3. (1) Calculate the US dollar value of the cash flows by year; and (2) the total cash flow for the 3 years. Show how you derive answers.

 

Company X has a beta of .85, the risk-free rate of return is 1%, and the average return on the market is 9%. (1) Calculate the required rate of return on Company X's stock. Show how you derive the answer. (2) Does Company X's stock have greater risk, the same risk, or less risk than the average stock? Explain.

 

The 1-year interest rate is 7% in the U.S. and 3% in Japan. How much would the yen have to appreciate for a U.S. investor to get the same return on both U.S. and Japanese investments? Show you derive the answer.

 

MLC Audio has decided to issue 3-year bonds denominated in 10 million Singapore dollars. The bonds have a coupon rate of 10%. The Singapore dollar is expected to appreciate from its current level of $.82 to $.80, $.79, and $.78 in years 1, 2, and 3, respectively. Calculate the financing cost (in percent) of these bonds. Show how you derive the answer.

 

Marcus, Inc., a U.S. company takes out a 1-year loan in Germany. The U.S. 1-year interest rate is 5%, and the German 1-year interest rate is 6%. The spot rate of the euro is $1.33 and the 1-year forward rate is $1.29. Calculate the effective financing rate for Marcus. Show how you derive the answer.

 

A U.S. company is considering a project in Mexico. Estimated cash flows are 10 million Mexican pesos the first year and 20 million Mexican pesos the second year. The U.S. company would incur a cost of $2 million at the start of the project, and its cost of capital is 12%. The expected spot rate is $0.13 for Year 1 and $0.11 for Year 2. (1)Calculate the net present value of this project . Show how you derive the answer; and (2) Should the U.S. company invest in the project? Why or why not?