International financial management questions
Will you please assist me in these questions. Help needed as soon as possible, thank you. I have been misled several times so I kindly request you please if you are not familiar with the subject do not guess answers, please explain your answers so I can follow. Thank you so much© SolutionLibrary Inc. solutionlibary.com 9836dcf9d7 https://solutionlibrary.com/business/strategy-and-business-analysis/international-financial-management-questions-7fb5
...ation, exchange rate fluctuation, and high expense.
Question 5. The break-even salvage value of a particular project is the salvage value necessary to:
A) offset any losses incurred by the subsidiary in a given year.
B) offset any losses incurred by the MNC overall in a given year.
C) make the project have zero profits.
D) make the project's return equal the required rate of return.
C) make the project have zero profits. This is the salvage value required to achieve zero NPV for the project.
Question 6: If a subsidiary project is assessed from the subsidiary's perspective, then an expected appreciation in the foreign currency will affect the feasibility of the project:
C) either positively or negatively, depending on the percentage appreciation.
D) none of these.
none of these; If we use the perspective of the home company/holding company, if the NPV is positive an appreciation will bring in more money to the home company.
Question 7: Which of the following is not an advantage of international acquisitions over the establishment of a new subsidiary?
A) the firm can immediately expand its international business.
B) the firm benefits from existing customer relationships.
C) international acquisitions are generally cheaper than the establishment of a new subsidiary.
D) an international acquisition typically generates quicker and larger cash flows than the establishment of a new subsidiary.
E) All of these are advantages of international acquisitions.
All of these are advantages of international acquisitions. I was doubtful about "international acquisitions are generally cheaper". However, the cost of setting up a new subsidiary is very high and in some cases prohibitive.
Question 8: Based on information in the text, the following factors should be considered in an international acquisition except:
A) the target's willingness to be acquired.
B) the target's previous acquisition history.
C) the target's previous cash flows.
D) the target's local economic conditions.
the target's previous acquisition history. This is not of great importance to the acquiring company because it will not have an effect in the future.
Question 9: If an MNC sells a product in a foreign country and imports partially manufactured components needed for production to ...