Brexit has led to the relocation of many multinational companies from the United Kingdom to continental Europe. This has in turn reduced the demand for real estate and many other local goods and services in the country on a long-term basis. What is the likely long-run impact of the change in the demand for local goods and services on the real exchange rate of the British pound?

Country Analysis

Selected Country: UNITED ARAB EMIRATES (UAE)

1. Economic status and growth
   • GDP, real GDP, real GDP per capita, PPP adjusted GDP per capita. Growth rates of GDP, population – you can use website gapminder for relevant tools and information.
   • Sectorial contribution to GDP
   • Inflation

Type or paste question here

Assume that you are a Financial Manager of Starbucks Coffee, Inc., a multi-national corporation. You are in charge of determining the impact of exchange rate changes on the firm. Changes in currency exchange affect both the balance sheet and the income statement. The balance sheet impact occurs when the value of international assets are translated to U.S. dollars. The values of those assets change as the exchange rate changes. The value of costs, revenue, and profit also are impacted on the income statement because of exchange rate risk. Consider that Starbucks has the following investments in coffee bean production and processing:

Table One:

            The expense of all the labor, production, and beans will require the following foreign currency amounts during the current year:

                        Table Two:

            Starbucks Coffee has also invested in store facilities to sell coffee products. The countries and the value of the investments are as follows:

                        Table Three:

            The “Net Profit” from these countries during the current year is as follows:

                        Table Four:

            The current spot exchange rates per one U.S. dollar are as follows:

                                    Table Five:

            As the Financial Manager for Starbucks, your task is to determine the following:

2) Convert the “Net Profit” generated in Canada, Japan, and the United Kingdom shown

                        in Table Four above to U.S. dollars to calculate the total profits realized by Starbucks,

                        Inc. during the current year in U.S. dollars.

a. Starbuck’s “Return on Investment” (ROI) can be calculated using the following formula

Net Profit in U.S. dollars from Question #2 above/Total Investment for Production and Store Facilities in Tables One and Three above

=      ROI

                                  What is Starbuck’s “Return on Investment” for the current year?

Ahmad, Bong and Cathy are the directors of Alpha Sdn Bhd (“Alpha”), a private limited company situated in Bandar Sunway. The company is involved in the leisure and hospitality business covering theme parks, gaming, hotels, seaside resorts and entertainment for over 50 years. Each of the directors holds 15% of the company’s share capital. Answer the following separate and independent questions:

a. Beta Bhd (“Beta”) is a public limited company. The company wishes to enter into a contract with “Alpha” for the supply of iron and steel to be used for Alpha’s theme parks. The Board of Directors of “Alpha” had a meeting last month to decide on the matter. They decided that the company will proceed with the contract with “Beta”. However, recently, after entering and completing the contract, they discovered that the Managing Director of “Beta” is Bakar, who is a good friend of Bong.

b. Recently, “Alpha” contracted to buy a piece of land from Ahmad which was to be converted to a water theme park. The market value of the land is RM 600,000. “Alpha” bought the property at RM 550,000.
Advise the Board of Directors of “Alpha” on the legal issues arising in the above questions.

Internal Rate of Return Method for a Service Company

The Riverton Company, announced a $608,580 million expansion of lodging properties, ski lifts, and terrain in Park City, Utah. Assume that this investment is estimated to produce $98,000 million in equal annual cash flows for each of the first eight years of the project life.

a. Determine the expected internal rate of return of this project for eight years, using the present value of an annuity of $1 table above.
%

Exchange vs Nonexchange Transactions

Classify each transaction below as exchange or nonexchange. If it is a nonexchange transaction, classify it in one of the four categories of nonexchange transactions. Explain your answer.

1. Merchant collects state cigarette tax on sale of a pack of cigarettes.

2. State reimburses schools for costs related to special education of handicapped children. The school must verify eligibility of the children.

3. State fines for hunting illegally on protected state wildlife preserve.

4. City property taxes are paid by owner.

5. Hotel tax is collected at checkout.

6. Donor provides $300,000 to a city homeless shelter and specifies $100,000 may be spent each year.

7. County landfill collects fee from citizen dumping trash.

8. Income tax is withheld from an employee's paycheck.

9. A business donates cash for scholarships to a public university and specifies the scholarships must be for study abroad.

10. A corporation makes a grant to a public university to conduct research on genetics coding, and the university agrees to give the corporation all patent rights on results of the genetic coding research.

A recreation center would have the estimated value

• $1,000,000 if it has no public swimming pool

• $1,800,000 if it has a public swimming pool with 2 lanes

• $2,200,000 if it has a public swimming pool with 3 lanes

• $2,400,000 if it has a public swimming pool with 4 lanes

The pool costs $400,000 with 2 lanes. Each additional lane would cost $300,000. The city Park & Recreation Board is a bureaucracy that overview the center construction. The Board are the slack maximizer. Use this to answer the following 2 questions.

Answer for each questions are c and b, respectively, Please provide detail explanation ( not in handwriting form which I may not recognize it)

12. According to the Niskanen’s model of slack maximization, the Board will propose

a. to build the center with no swimming pool

b. the swimming pool with 2 lanes

c. the swimming pool with 3 lanes

d. the swimming pool with 4 lanes

13. According to the Niskanen’s model of slack maximization, the Board will request what budget for the pool?

a. $1,000,000 b. $1,200,000 c. $1,800,000 d. $2,200,000

Please provide the table and answers to each question with calculations, Thank you

A company producing plastic cell-phone cases uses a $5,000 blower, a $2,000 processor, and $4,200 worth of molds. The rent paid for their space in an industrial park is $5,000 per production period. The cost of materials (resins and compounds) is $10 per unit. The cell phone case market is competitive, with a market price of $25. Each unit of labor is paid $5,000 per production period. The production technology is described by Table 2.

1(a). How many cell-phone cases will the company produce to maximize profit? What is the maximum amount of profit?

1(b). Using the company's short-run cost curves (ATC, AVC, and MC) and the MR curve, demonstrate how you found your answer to Question 1(a).

1(c). What is the company's break-even price?

Kaimalino Properties (KP) is evaluating six real estate investments. Management plans to buy the properties today and sell them five years from today. The following table summarizes the initial cost and the expected sale price for each property, as well as the appropriate discount rate based on the risk of each venture.

KP has a total capital budget of $18,000,000 to invest in properties.

a. What is the IRR of each investment?

b. What is the NPV of each investment?

c. Given its budget of $18,000,000, which properties should KP choose?

d. Explain why the profitability index method could not be used if KP's budget were 12,000,000 instead. Which properties should KP choose in this case?