User Account

All Pages

Should blades establish a subsidiary in thailand

Assignment Help Financial Management
Reference no: EM131299894

1. Should the sales and the associated costs of 180,000 pairs of roller blades to be sold in Thailand under the existing agreement be included in the capital budgeting analysis to decide whether Blades should establish a subsidiary in Thailand? Should the sales resulting from a renewed agreement be included? Why or why not?

2. Using a spreadsheet, conduct a capital budgeting analysis for the proposed project, assuming that Blades renews the agreement with Entertainment Products. Should Blades establish a subsidiary in Thailand under these conditions?

3. Using a spreadsheet, conduct a capital budgeting analysis for the proposed project assuming that Blades does not renew the agreement with Entertainment Products. Should Blades establish a subsidiary in Thailand under these conditions? Should Blades renew the agreement with Entertainment Products?

4. Since future economic conditions in Thailand are uncertain, Ben Holt would like to know how critical the salvage value is in the alternative you think is most feasible.

5. The future value of the baht is highly uncertain. Under a worst-case scenario, the baht may depreciate by as much as 5 percent annually. Revise your spreadsheet to illustrate how this would affect Blades' decision to establish a subsidiary in Thailand.

MINI CASE
Since Ben Holt, Blades' chief financial officer (CFO), believes the growth potential for the roller blade market in Thailand is very high, he, together with Blades' board of directors, has decided to invest in Thailand. The investment would involve establishing a subsidiary in Bangkok consisting of a manufacturing plant to produce ?oSpeedos,?? Blades' high-quality roller blades. Holt believes that economic conditions in Thailand will be relatively strong in 10 years, when he expects to sell the subsidiary.

Reference no: EM131299894

Questions Cloud

Quality of digital video output : Identify and explain the three factors that influence the quality of digital video output.
What is business continuity : What is business continuity? What are two of the major tasks associated with disaster recovery?
Should the sampsons invest their savings in mutual funds : Why might mutual funds be more appropriate investments for the Sampsons than individual stocks or bonds?
Binary search tree : Implement the BinarySearchTree class. The BinarySearchTree class extends the BinaryTree class. Both can be seen here. Your assignment is to implement all of the abstract methods of the BinaryTree class recursively. They are:
Should blades establish a subsidiary in thailand : Should the sales resulting from a renewed agreement be included? Why or why not?- Should Blades establish a subsidiary in Thailand under these conditions?
Who presented the idea for the first index fund : Who presented the idea for the first index fund? What was the purpose for which s/he created the fund?
Provide a detailed overview of the selected us investment : Provide a detailed overview of the selected U.S. investment indicating the rationale for your selection.- Analyze the price of the investment to its market index for the past five (5) years.
Discuss the effects of gay adoption and foster parenting : Write an Essay on Topic- Discuss the effects of gay adoption and foster parenting to adopt children
Information technology internal controls framework : COBIT is a widely adopted information technology internal controls framework. COBIT is distributed by ISACA. Access ISACA's Web site at http://www.isaca.org/Knowledge-Center/COBIT/Pages/Overview.aspx.

Reviews

Write a Review

Financial Management Questions & Answers

  What will be its total dividend payment

Pate & Co. has a capital budget of $3,000,000. The company wants to maintain a target capital structure that is 20% debt and 80% equity. The company forecasts that its net income this year will be $3,500,000. If the company follows a residual dividen..

  Interest or discount rate with interest compounded annually

What is the present value of $7,800 received 13 years from now using a 16% interest or discount rate, with interest compounded annually?

  The yield to maturity on the company outstanding bonds

Percy Motors has a target capital structure of 40% debit and 60% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 9, and its tax rate is 40%. Percy's CFO estimates that the company's WACC is 9.96% Wh..

  What were the holding period returns of your investment

You purchased 34 shares of common stocks from ABC Corp on Jan 1st, 2000 for $27.45 per share. You sold all the shares on Dec 31st, 2004 for $29.17 per share. ABC Corp distributed annual dividends of $0.05, $0.11, $0.13 per share on Dec 28th, 2000, De..

  In what year do you break even on your investment

You invest $6,300 now and receive $1,500 at the end of year 1, $1,400 at the end of year 2, $1,300 at the end of year 3 and so on. In what year do you break even on your investment? Use the discounted payback approach, not simple payback, and assume ..

  Compare two statements about exchange rates

Compare two statements about exchange rates that Henry Paulson, Treasury secretary under President Bush, made in 2007:

  Invest lump sum amount in an equity fund

Today, you invest a lump sum amount in an equity fund that provides an 10% annual return. You would like to have $11,700 in 6 years to help with a down payment for a home. How much do you need to deposit today to reach your $11,700 goal?

  It is important for society as whole to solve agency problem

It is important for society as a whole to solve the agency problem,

  How many years do these bonds have left until they mature

LKD Co. has 11 percent coupon bonds with a YTM of 8.7 percent. The current yield on these bonds is 10.3 percent. How many years do these bonds have left until they mature?

  Opinion of given investor stocks expected return exceeds

If in the opinion of a given investor a stock's expected return exceeds its required return, this suggests that the investor thinks

  What was the inflation rate of airfare

As reported by the Bureau of Labor Statistics, the CPI for Airfare in 2263 was 583.9 (using a base year of 1914 = 100). The CPI for Airfare in 2264 was 615.8. Based on this data, what was the inflation rate of airfare from 2263 to 2264?

  What is your monthly mortgage payment

You borrow $165,000 to buy a house. The mortgage interest rate is 7.5 percent and the loan period is 30 years. Payments are made monthly. What is your monthly mortgage payment?

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: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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