User Account

All Pages

Identify the factors that would be affected

Assignment Help Financial Management
Reference no: EM132907684

Problem - Valuation of an MNC - Birm Co., based in Alabama, is considering several international opportunities in Europe that could affect the value of its firm. The valuation of its firm is dependent on four factors: (1) expected cash flows in dollars, (2) expected cash flows in euros that are ultimately converted into dollars, (3) the rate at which it can convert euros to dollars, and (4) Birm's weighted average cost of capital. For each opportunity, identify the factors that would be affected.

a. Birm plans a licensing deal in which it will sell technology to a firm in Germany for $3 million; the payment is invoiced in dollars, and this project has the same risk level as its existing businesses.

b. Birm plans to acquire a large firm in Portugal that is riskier than its existing businesses.

c. Birm plans to discontinue its relationship with a U.S. supplier so that it can import a small amount of supplies (denominated in euros) at a lower cost from a Belgian supplier.

d. Birm plans to export a small amount of materials to Ireland that are denominated in euros.

Reference no: EM132907684

Questions Cloud

What is the value of the payments in today dollars : If the annual interest rate stays constant at 9%, what is the value of these payments in today's dollars? Round your answer to the nearest whole dollar.
Probability of the spinner pointer landing on the cd sector : Maria is at a country fair playing a game. She spins the spinner to determine what prize she will win. The spinner is divided into 6 equal sectors:
Find what is the present value of the payments : The annual interest rate will remain constant at 11%. What is the present value of these payments? Round your answer to the nearest whole dollar.
How much will need to deposit in account at end of year : You want to make annual identical deposits, how much will you need to deposit in your account at the end of each year to reach your goal?
Identify the factors that would be affected : Valuation of an MNC - Birm's weighted average cost of capital. For each opportunity, identify the factors that would be affected
How much do think the stock market will return over : Do you think it will return enough to justify the added risk? How much do you think the stock market will return over and above the Treasury10-year bond rate?
Describe the trade-offs that are involved for each method : Describe the trade-offs that are involved for each method (such as exporting, direct foreign investment, etc.) that Snyder could use to achieve its goal
Explain the differences in potential risk and return : Explain the differences in potential risk and return between a licensing agreement with a foreign firm and the acquisition of a foreign firm
Explain purpose of generally accepted accounting principles : Explain the purpose of Generally Accepted Accounting Principles (GAAP), including the organization currently responsible for the creation and governance

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd