Fin 565 week 5 homework - Study guides, Class notes & Summaries

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: 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 ...

FIN 565 Week 5 Homework Solutions Question: Host Government Incentives for DFI Why would foreign governments provide MNCs with incentives to undertake DFI there? 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. expe...

FIN 565 Week 7 Homework Solutions Question: Banker’s Acceptances Describe how foreign trade would be affected if banks did not providetrade- related services. 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 T...

FIN 565 Week 1 Homework Solutions Question: Imperfect Markets Explain how the existence of imperfect markets has led to the establishment of subsidiaries in foreign markets. 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 busi...

FIN-565 Week 6 Homework Solutions Question: Pricing a Foreign Target Alaska, Inc., would like to acquire Estoya Corp., which is located in Peru. In initial negotiations, Estoya has asked for a purchase price of 1 billion Peruvian new sol. If Alaska completes the purchase, it would keep Estoya’s operations for two years and then sell the company. In the recent past, Estoya has generated annual cash flows of 500 million new sol per year, but Alaska believes that it can increase these cash flo...