Questions from Financial Management


Q: Bear Co. and Viking, Inc., are automobile manufacturers that

Bear Co. and Viking, Inc., are automobile manufacturers that desire to benefit from economies of scale. Bear has decided to establish distributorship subsidiaries in various countries, whereas Viking...

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Q: The Sports Exports Company receives British pounds each month as payment for

The Sports Exports Company receives British pounds each month as payment for the footballs that it exports. It anticipates that the pound will depreciate over time against the U.S. dollar. 1. How can...

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Q: Raider Chemical Co. and Ram, Inc., had similar intentions

Raider Chemical Co. and Ram, Inc., had similar intentions to reduce the volatility of their cash flows. Raider implemented a long-range plan to establish 40 percent of its business in Canada. Ram impl...

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Q: If the United States imposed long-term restrictions on imports,

If the United States imposed long-term restrictions on imports, would the amount of DFI by non-U.S. MNCs in the United States increase, decrease, or be unchanged? Explain.

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Q: Some MNCs establish a manufacturing facility where there is a relatively low

Some MNCs establish a manufacturing facility where there is a relatively low cost of labor, but they sometimes close the facility later when the cost advantage dissipates. Why do you think the relativ...

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Q: Offer your opinion on why the economies of some less developed countries

Offer your opinion on why the economies of some less developed countries with strict restrictions on international trade and DFI are somewhat independent from the economies of other countries. Why wou...

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Q: Ohio, Inc., considers establishing a manufacturing plant in central Asia

Ohio, Inc., considers establishing a manufacturing plant in central Asia, which would be used to cover its exports to Japan and Hong Kong. If Ohio is concerned about possible terrorism, how might this...

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Q: Bronco Corp. has decided to establish a subsidiary in Taiwan that

Bronco Corp. has decided to establish a subsidiary in Taiwan that will produce MP3 players and sell them there. It expects that its cost of producing these MP3 players will be onethird the cost of pro...

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Q: Why should capital budgeting for subsidiary projects be assessed from the parent’s

Why should capital budgeting for subsidiary projects be assessed from the parent’s perspective? Which additional factors that normally are not relevant for a purely domestic project deserve considerat...

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Q: Athens, Inc., established a subsidiary in the United Kingdom that

Athens, Inc., established a subsidiary in the United Kingdom that was independent of its operations in the United States. The subsidiary’s performance significantly exceeded expectations. Consequently...

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