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Why do you think MNCs continuously assess 1. Motives for Restructuring. Why do you think MNCs continuously assess possible forms of multinational restructuring, such as foreign acquisitions or downsizing of a foreign subsidiary? 2. Exposure to Country Regulations. Maude Inc., a U.S.-based MNC, has recently acquired a firm in Singapore. To eliminate inefficiencies, Maude downsized the target substantially, eliminating two-thirds of the ...

Other / Other 13 Apr 2016

Memphis Co. hires you as a consultant 1. Exposure of Domestic Firms. Why are the cash flows of a purely domestic firm exposed to exchange rate fluctuations? 2. Measuring Economic Exposure. Memphis Co. hires you as a consultant to assess its degree of economic exposure to exchange rate fluctuations. How would you handle this task? Be specific. Economics Assignment Help, Economics Homework help, Economics Study Help, Economics Cours ...

Other / Other 13 Apr 2016

Why might Sooner’s market share be more volatile 1. Economic Exposure. Lubbock, Inc., produces furniture and has no international business. Its major competitors import most of their furniture from Brazil and then sell it out of retail stores in the United States. How will Lubbock, Inc., be affected if Brazil’s currency (the real) strengthens over time? 2. Economic Exposure. Sooner Co. is a U.S. wholesale company that im ...

Other / Other 13 Apr 2016

Zemart is a U.S. firm that plans to establish international business 1. Exposure to Pegged Currency System. Assume that the Mexican peso and the Brazilian currency (called the “real”) have depreciated against the dollar recently, due to the high inflation rates in those countries. Assume that inflation in these two countries is expected to continue and that it will have a major effect on these currencies if they are still a ...

Other / Other 13 Apr 2016

San Gabriel’s required return on that subsidiary 1. Divestiture Decision. Colorado Springs Co. plans to divest either its Singapore or its Canadian subsidiary. Assume that if exchange rates remain constant, the dollar cash flows each of these subsidiaries would provide to the parent over time would be somewhat similar. However, the firm expects the Singapore dollar to depreciate against the U.S. dollar, and the Canadian dollar to ...

Other / Other 13 Apr 2016

Blore would like you to value this target 1. Valuing a Foreign Target. Blore Inc., a U.S.-based MNC, has screened several targets. Based on economic and political considerations, only one eligible target remains in Malaysia. Blore would like you to value this target and has provided you with the following information: • Blore expects to keep the target for three years, at which time it expects to sell the firm for 300 million Malay ...

Other / Other 13 Apr 2016

Transaction versus Economic Exposure 1. Transaction versus Economic Exposure. Compare and contrast transaction exposure and economic exposure. Why would an MNC consider examining only its “net” cash flows in each currency when assessing its transaction exposure? 2. Assessing Transaction Exposure. Your employer, a large MNC, has asked you to assess its transaction exposure. Its projected cash flows are as follows for the ne ...

Other / Other 13 Apr 2016

Senser intended to operate the subsidiary 1. Pricing a Foreign Target. Alaska Inc. would like to acquire Estoya Corp., which is located in Peru. In initial negotiations, Estoya has asked for a purchase price of 1 billion Peruvian new sol. If Alaska completes the purchase, it would keep Estoya’s operations for two years and then sell the company. In the recent past, Estoya has generated annual cash flows of 500 million new sol p ...

Other / Other 13 Apr 2016

Kentucky would only retain the business 1. Foreign Acquisition Decision. Minnesota Company consists of two businesses. Its local business is expected to generate cash flows of $1,000,000 at the end of each of the next 3 years. It also owns a foreign subsidiary based in Mexico, whose business is selling technology in Mexico. This business is expected to generate $2,000,000 in cash flows at the end of each of the next three years. The mai ...

Other / Other 13 Apr 2016

What types of Asian firms would have been affected 1. Impact of Exchange Rates on Earnings. Cieplak, Inc., is a U.S.-based MNC that has expanded into Asia. Its U.S. parent exports to some Asian countries, with its exports denominated in the Asian currencies. It also has a large subsidiary in Malaysia that serves that market. Offer at least two reasons related to exposure to exchange rates why Cieplak’s earnings were reduced duri ...

Other / Other 13 Apr 2016