International Finance
Cash flows in various parts of a multinational corporate system will be denominated in different currencies. Hence, exchange rates must be included in all financial analyses.
Foreign exchange rate quotations can be found in The Wall Street Journal and in other leading print publications and on websites. Exchange rates are given in two different ways: (1) Direct Quotation – the home currency price of one unit of the foreign currency and (2) Indirect Quotation – the foreign currency price of one unit of the home currency. If the foreign exchange markets are in equilibrium, which is usually the case for the major traded currencies, the two quotations must be reciprocals of each other.
Example, Canadian Dollar and US Dollar:
Canadian Dollar 1/0.9814 = 1.0190
1/1.0190 = 0.9814
Suppose, though, that a German executive is flying to Tokyo on business. The exchange rate in which he or she is interested is not euros or yen per dollar – rather, the issue is how many yen can be purchased with a euro. This is called a cross rate – exchange rate between any two currencies.
Example, spot rate for Euro is €0.7511/$l
spot rate for Yen is ¥96.02/$1
For the German national, the cross rates are found as follows:
Euro / $ Yen / $
Euro / Yen exchange rate = or Yen / Euro exchange rate =
Yen / $ Euro / $
Problem:

Monblanc Trading Company imports French cheeses for distribution in the United States. On July 1, the company purchased cheese costing 100,000 Euro. Payment is due in Euro on October 1. The spot rate on July 1 was $1.20 per Euro, and on October 1, it was $1.25 per Euro.
Determine the following:
1. The company’s liabilities in US Dollars prior to payment
2. The amount of payment in US Dollars on October 1
3. The exchange gain or loss
Briefly discuss implications.

please give me your answer

11) Which of the following is a business transaction?

1. A company hires a new marketing manager.
2. A company signs a contact for services to be provided during the first quarter of the next fiscal year.
3. A company pays its employees a year-end bonus.
4. A company applies for a mortgage that will be used to purchase a new office building.

12) The owner of a_____ is personally liable for all the business debts.

A) proprietorship                                             B) corporation

C) limited-liability company D) All of the above are correct.

13) The assets of a company:

1. include property, plant, and equipment and accounts payable.
2.            represent economic resources that are expected to produce a future benefit.
3. include short-term investments and notes payable.
4. must equal the liabilities of the company.

14) The income statement:

1. reports the results of operations since the inception of the business.
2.             covers a defined period of time.
3. must cover only a month in time.
4. is not dated.

15) Every journal entry:

1. must debit at least one account and credit at least one account.
2.            affects both an income statement account and a balance sheet account.
3. must increase at least one account and decrease at least one account.
4. is recorded in either the journal or the ledger.

16) Which of the following is a CORRECT statement about the two bases of accounting (Cash and accrual basis of Accounting)?

1. Cash-basis accounting records expenses only at the end of the  month.
2.     GAAP requires accrual accounting.
3. Only the largest companies in the United States use accrual accounting.
4. Cash-basis accounting records revenues when they are earned.

17) The proper order for the accounting process is:

1. transaction occurs, posting, journalizing.
2.            transaction occurs, posting, transaction analyzed, journalizing.
3. transaction occurs, transaction analyzed, journalizing, and posting.
4. posting, transaction occurs, journalizing.

32- Motor neurons that carry information away from the brain or spinal cord are known as afferent neurons.

Select one:

True

False

33- At home, safe food-handling practices can be sorted into four basic categories: (1) cleanliness, (2) separation, (3) cooking, and (4) chilling.

Select one:

True

False

34- The maximum amount of air that can be moved into and out of the lungs during forceful breathing is called ________.

Select one:

a. vital capacity

b. tidal volume

c. residual volume

d. total lung capacity

35- If a person were unable to produce much of this substance, the gastric juices might destroy the stomach lining.

Select one:

a. chyme

b. HCl

c. mucus

d. pepsin

36- The pitch of the voice depends on the tension of the vocal cords.

Select one:

True

False

37- Which one of these agencies oversees the safety of poultry products in the United States?

Select one:

a. FSIS

b. ATF

c. WHO

d. FDA

38- The synaptic cleft is the narrow space between two neurons.

Select one:

True

False

39- Inflammation of the mucous membranes of the sinuses is called ________.

Select one:

a. asthma

b. sinusitis

c. laryngitis

d. respiratory distress syndrome

40- Carlotta developed indigestion and pain under her navel over the weekend. As the workweek progressed, the pain worsened and moved to a point in the lower right abdomen, and she started to vomit and experience nausea and fever. You suspect that she is suffering from ________.

Select one:

a. heartburn

b. colorectal cancer

c. appendicitis

d. peptic ulcer

41- This enzyme will break down starch into smaller subunits.

Select one:

a. pepsin

b. renin

c. lipase

d. amylase

WestGas​ Conveyance, Inc., is a large U.S. natural gas pipeline company that wants to raise​ $120 million to finance expansion. WestGas wants a capital structure that is 50​% debt and 50​% equity. Its corporate combined federal and state income tax rate is 30​%. WestGas finds that it can finance in the domestic U.S. capital market at the rates listed:

Both debt and equity would have to be sold in multiples of​ $20 million, and these cost figures show the component​ costs, each, of debt and equity if raised 50​% by debt and 50​% by equity. A London bank advises WestGas that U.S. dollars could be raised in Europe at the following​ costs, also in multiples of​ $20 million, while maintaining the 50/50 capital structure.

Each increment of cost would be influenced by the total amount of capital raised. That​ is, if WestGas first borrowed​ $20 million in the European market at 8​% and matched this with an additional​ $20 million of​ equity, additional debt beyond this amount would cost 11​% in the United States and 10​% in Europe. The same relationship holds for equity financing.

a. Calculate the lowest average cost of capital for each increment of​ $40 million of new​ capital, where WestGas raises​ $20 million in the equity market and an additional​ $20 in the debt market at the same time.

b. If WestGas plans an expansion of only​ $60 million, how should that expansion be​ financed? What will be the weighted average cost of capital for the​expansion?

WestGas​ Conveyance, Inc., is a large U.S. natural gas pipeline company that wants to raise​ $120 million to finance expansion. WestGas wants a capital structure that is 50​% debt and 50​% equity. Its corporate combined federal and state income tax rate is 36​%. WestGas finds that it can finance in the domestic U.S. capital market at the rates listed:

Both debt and equity would have to be sold in multiples of​ $20 million, and these cost figures show the component​ costs, each, of debt and equity if raised 50​% by debt and 50​% by equity. A London bank advises WestGas that U.S. dollars could be raised in Europe at the following​ costs, also in multiples of​ $20 million, while maintaining the 50/50 capital structure. Each increment of cost would be influenced by the total amount of capital raised. That​ is, if WestGas first borrowed​ $20 million in the European market at 8​% and matched this with an additional​ $20 million of​ equity, additional debt beyond this amount would cost 13​% in the United States and 12​% in Europe. The same relationship holds for equity financing.

a. Calculate the lowest average cost of capital for each increment of​ $40 million of new​ capital, where WestGas raises​ $20 million in the equity market and an additional​ $20 in the debt market at the same time.

b. If WestGas plans an expansion of only​ $60 million, how should that expansion be​ financed? What will be the weighted average cost of capital for the​expansion?

The goal of Chapter 2 is to give students an understanding of which courts have power to hear what disputes and when. Hence, the first major concept introduced in this chapter is jurisdiction. Jurisdiction generally involves 3 components: subject matter; territory; and person(s). Take for instance a city court like 36th District Court in Detroit.

By statute, 36th District Court has jurisdiction over landlord/tenant disputes, civil cases, subject to dollar limitations, garnishments, misdemeanor trials, felony arraignments, and traffic cases, among other things. These items comprise the court's subject matter jurisdiction.

Since 36th District Court is situated within the city of Detroit, incidents that occur within the city of Detroit, falling within the court's subject matter jurisdiction, give the court territorial jurisdiction.

Individuals who reside within the city of Detroit can be sued in 36th District if the matter falls within the court's subject matter jurisdiction, and individuals who commit offenses, e.g., traffic offenses, in the city fall within the court's jurisdiction. This is jurisdiction over the person(s), i.e., the defendant.

Careful attention in this chapter is given to the requirements for federal jurisdiction and to which cases reach the Supreme Court of the United States (SCOTUS). It might be emphasized at this point that the federal courts are not necessarily superior to the state courts. The federal system is simply an independent system authorized by the Constitution to handle matters of particular federal interest.

This chapter also covers alternatives to litigation that can be as binding to the parties involved as a court's decree. Alternative dispute resolution (ADR), including online dispute resolution, is another major topic discussed.

Discussion: In this age of the Internet, when people communicate via e-mail, texts, tweets, Facebook, and Skype, is the concept of jurisdiction losing its meaning?

Part 4: International Financial Management Citrus, Inc. is a medium-sized producer of citrus juice drinks in Florida. Until now, the company has confined its operations and sales to the United States, but its CEO, Heidi Sims, wants to expand into Europe. The first step would be to set up sales subsidiaries in Spain and Sweden, then to set up a production plant in Spain, and, finally, to distribute the product throughout the European Union. The firm’s financial manager, George Benson, is enthusiastic about the plan, but he is worried about the implications of the foreign expansion on the firm’s financial management process. He has asked you, the firm’s most recently hired financial analyst, to develop a 1-hour tutorial package that explains the basics of multinational financial management. The tutorial will be presented at the next board of director’s meeting. To get you started, Benson has supplied you with the following list of questions. A. What is a multinational corporation? Why do firms expand into other countries? B. Discuss at least six major factors which distinguish multinational financial management from financial management as practiced by a purely domestic firm. (Please consider doing additional research on this question and document your findings). C. Discuss exchange rate risk as they relate to multinational corporations. D. Describe the current International Monetary System. How does the current system differ from the system that was in place prior to August 1971? (Please consider doing additional research on this question and document your findings). E. What is the difference between spot rates and forward rates? When is the forward rate at a premium to the spot rate? At a discount? (Please consider doing additional research on this question and document your findings). F. From a managerial point of view, discuss how your responses above will help Citrus, Inc. as they plan to expand overseas.

The French government announced plans to convert state-owned power firms EDF and GDF into separate limited companies that operate in geographically distinct markets. BBC News reported that France’s CFT union responded by organizing a mass strike, which triggered power outages in some Paris suburbs. Union workers are concerned that privatizing power utilities would lead to large-scale job losses and power outages similar to those experienced in parts of the eastern coast of the United States and parts of Italy in 2003. Suppose that prior to privatization, the price per kilowatt hour of electricity was €0.13 and that the inverse demand for electricity in each of these two regions of France is P = 1.35 – 0.002Q (in euros). Furthermore, to supply electricity to its particular region of France, it costs each firm C(Q) = 120 + 0.13Q (in euros). Once privatized, each firm will have incentive to maximize profits.

Determine the number of kilowatt hours of electricity each firm will produce and supply to the market, and the per-kilowatt hour price.

Instructions: Enter your price responses rounded to two decimal places.

Quantity of kilowatt hours supplied: ________

Per-kilowatt hour price: € ________


Compute the price elasticity of demand at the profit maximizing price–quantity combination. ________



Does the price elasticity at the profit-maximizing price–quantity combination make sense?

a. No - with linear demand, a monopolist always maximizes profits where elasticity is -1.

b. Yes - with linear demand, a monopolist will never maximize profit on the inelastic portion of the demand function.

c. Yes - with linear demand, a monopolist can maximize profits on any portion of the demand function.

d. No - with linear demand, a monopolist will never maximize profits on the elastic portion of the demand function.

How much more profit will each firm earn as a result of privatization? _______

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Discussion

What to Do

Please select from any one of the following activities. Make sure you answer all components of the question.

1. Herbert Spencer is credited with developing the “survival of the fittest” concept and the philosophic approach known as Social Darwinism. The idea behind this approach was societies evolve from primitive to civilized societies and that to help primitive societies interferes with the natural process of either evolving or becoming extinct. For example, nations like the United States have for decades intervened in sub-Saharan African countries in an attempt to fight AIDS and end poverty with little success. Discuss your thoughts on this subject and whether or not aid to poor societies actually helps them or simply creates dependency?

2. To understand peoples’ behavior, sociologists look at their social location in society. For this assignment, you will need to identify the corners in life you occupy by describing your job, income, education, gender, age, and race/ethnicity.   Explain how each of these elements influences your self-concept and behavior. Does your social location impact you when you go out (i.e., socially or romantically)? When it comes to life chances and opportunities? Do you experience discrimination?