Reference no: EM131308615
Brussels Mustard Company Wail of Belgium has been exporting French-style mustard to the United States for many years and has (level, opal a good reputation. Costs within the European Union have now risen So that BMC is no longer price competitive in the United States. Hence, it is considering purchasing an existing U,S. timid factory and converting it hut) a manufacturing plant for the U.S. If purchased. the new wholly owned subsidiary will have the following attributes:
• The initial' (t =1) sales price per container will tomtit% $20.
• First-year production and sales will be 1 million containers per year, and physical sales will grow at 10e!, per annum for the first three years and then stabilize never. First-year production costs will be $15 per container. Administrative costs kill he Si million per year1 and depredation will be SI million per year.
• Prices and costs in future years will rise with U.S, inflation as follows:
a. 4,00% p.a. for raw material sand labor
b. 3.00% p.a. for sales prices
c. No change for administrative costs or depreciation
• BMC use 15% for its weighted average cost of capital.
• The value of the U.S. factory to BMC at the end of the third year is assumed to be equal to an infinite stream of third-year dividends, discounted at 20% p.a. The higher discount rate is because tithe perceived greater risk in the future.
• Production is for sale. Hence production volume equals sales volume, All sales are for cash.
• Corporate tax rate in the United States: 35%; Corporate tax rate in Belgium: 40%
• Current and expected exchange rate' are:
t1= $1.1000/€.
T2 = $1.20004:
t3= $1.3000/C
•BMC plans to have its U.S. subsidiary pay 80% of its profit back to the parent.
What is the maximum U.S. purchase price BMC can afford to pay back the U.S. affiliate?
How much will you have at the end of four years
: If the account pays 4.30 percent annually, how much will you have at the end of four years?
|
Retailer brick-and-mortar stores
: Also, evaluate the website's consistency with the retailer's brick-and-mortar stores in term of merchandise, pricing and other factors
|
Describe the steps necessary to restore operations
: A disgruntled employee takes a critical server home, sneaking it out afterhours. For each of the scenarios (a-e), describe the steps necessary to restore operations. Indicate whether law enforcement would be involved.
|
Conduct research online regarding the role
: Conduct research online regarding the role that strategic information systems (SIS) have in creating an organization's competitive strategy. Discuss specifically how the SIS integrates the organizational strategic vision and accomplishes a competi..
|
What is the maximum us purchase price
: Brussels Mustard Company Wail of Belgium has been exporting French-style mustard to the United States.- What is the maximum U.S. purchase price BMC can afford to pay back the U.S. affiliate?
|
What would be the percentage change is bond value
: Assume you purchased a Verizon Corporation Bond one year ago for $915.60 when the market rate of interest was 10.3%. This bond matures on February 5, 2026 (assume there are exactly 10 years to maturity) and is contracted to pay a semi-annual coupons ..
|
Influence on managerial decisions
: Consider the following questions regarding health care reimbursement policies and their influence on managerial decisions:
|
Supine position on the operating roomtable
: The patient was placed in the supine position on the operating roomtable, where her right hand and forearm were prepped with Betadine and draped in asterile fashion. We infiltrated the thenar crease area with 1% Xylocaine, and onceadequate anesthe..
|
Treatment of employer-provided benefits
: Describe the tax treatment of employer-provided benefits.
|