FIN565 Study guides, Class notes & Summaries

FIN565 WK Overview of Financial Statements FIN/575 Overview of Financial Statements Lifetouch Inc. is a photography company that allows its photographers to shoot in a studio and on location. Over the years the company has ceased to move forward ending in 2017, luckily it was acquired by another company right before they closed. The photography business has always been a passion and to see the financial statements from a failed company can help to create the chances of not recreating the sam...

1. Question: Banker’s Acceptances a. Describe how foreign trade would be affected if banks did not providetrade- related services. b. How can a banker’s acceptance be beneficial to an exporter, an importer, anda bank? 2. Question: Letters of Credit Ocean Traders of North America is a firm based in Mobile, Alabama, that specializes in seafood exports and commonly uses letters of credit (L/Cs) to ensure payment. It recently experienced a problem, however. Ocean Traders had an irrevocable L/...

1. Question: Host Government Incentives for DFI Why would foreign governments provide MNCs with incentives to undertake DFI there? 2. Question: DFI Location Decision Decko Co. is a U.S. firm with a Chinese subsidiary that produces smart phones in China and sells them in Japan. This subsidiary pays its wages and its rent in Chinese yuan, which is stable relative to the dollar. The smartphones sold to Japan are denominated in Japanese yen. Assume that Decko Co. expects that the Chinese yuan will ...

1. Question: Imperfect Markets a. Explain how the existence of imperfect markets has led to the establishment of subsidiaries in foreign markets. b. If perfect markets existed, would wages, prices, and interest rates among countries be more similar or less similar than under conditions of imperfect markets? Why? 2. Question: Benefits and Risks of International Business. As an overall review of this chapter, identify possible reasons for growth in international business. Then list the variou...

1. Question: Covered Interest Arbitrage Assume the following information: 2. Question: Interest Rate Parity Consider investors who invest in either U.S. or British one-year Treasury bills. Assume zero transaction costs and no taxes. a) If interest rate parity exists, then the return for U.S. investors who use covered interest arbitrage will be the same as the return for U.S. investors who invest in U.S. Treasury bills. Is this statement true or false? If false, correct the statement. b) If in...

1. Question: Sources of Supplies and Exposure to Exchange Rate Risk Laguna Co.(a U.S. firm) will be receiving 4 million British pounds in one year. It will need to make a payment of 3 million Polish zloty in one year. It has no other exchange rate risk at this time. However, it needs to buy supplies and can purchase them from Switzerland, Hong Kong, Canada, or Ecuador. Another alternative is that it could also purchase one-fourth of the supplies from each of the four countries mentioned in the p...

1. Question: Percentage Depreciation Assume the spot rate of the British pound is $1.73. The expected spot rate 1 year from now is assumed to be $1.66. What percentage depreciation does this reflect? 2. Question: Inflation Effects on Exchange Rates Assume that the U.S. inflation rate becomes high relative to Canadian inflation. Other things being equal, how should this affect the (a) U.S. demand for Canadian dollars, (b) supply of Canadian dollars for sale, and (c) equilibrium value of the Cana...

FIN 565 Week 6 Case Study; Small Business Dilemma, Page 501, text

FIN 565 Week 3 Case Study; Small Business Dilemma, Page 255, text

FIN 565 Week 2 Case Study; Small Business Dilemma, Page 130, text