what is the expected value of annual after-tax dollar cash flows assuming no repatriation of profits to the United States? A proposed foreign investment involves a plant whose entire output of 1 million units per annum is to be exported. With a selling price of $10 per unit, the yearly revenue from this investment equals […]
What will annual dollar cash flows be if no devaluation occurs? A proposed foreign investment involves a plant whose entire output of 1 million units per annum is to be exported. With a selling price of $10 per unit, the yearly revenue from this investment equals $10 million. At the present rate of exchange, dollar
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How would you forecast the $:SFr exchange rate 10 years ahead? Hilton International is considering investing in a new Swiss hotel. The required initial investment is $1.5 million (or SFr 2.38 million at the current exchange rate of $0.63 = SFr 1). Profits for the first 10 years will be reinvested, at which time Hilton
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How will fluctuations in the value of the Swiss franc affect this investment? \Hilton International is considering investing in a new Swiss hotel. The required initial investment is $1.5 million (or SFr 2.38 million at the current exchange rate of $0.63 = SFr 1). Profits for the first 10 years will be reinvested, at which
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What factors are relevant in evaluating this investment? Hilton International is considering investing in a new Swiss hotel. The required initial investment is $1.5 million (or SFr 2.38 million at the current exchange rate of $0.63 = SFr 1). Profits for the first 10 years will be reinvested, at which time Hilton will sell out
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Do its lenders face any currency risks? Huaneng Power International is a large Chinese company that runs coal-fired power plants in five provinces and in Shanghai. It has close to $1.2 billion in U.S. dollar debt whose proceeds it has used to purchase equipment abroad. a. What currency risks does Huaneng face? b. Do its
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What currency risks does Huaneng face? Huaneng Power International is a large Chinese company that runs coal-fired power plants in five provinces and in Shanghai. It has close to $1.2 billion in U.S. dollar debt whose proceeds it has used to purchase equipment abroad. a. What currency risks does Huaneng face? b. Do its lenders
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Suppose the company is a multinational firm with sales in Japan and inputs that are determined primarily in dollars. How should this affect its financing choice? A U.S. company needs to borrow $100 million for a period of seven years. It can issue dollar debt at 7% or yen debt at 3%. a. Suppose the
Suppose the company is a multinational firm with sales in the United States and inputs purchased in Japan. How should this affect its financing choice? Di Giorgio International, a subsidiary of California-based Di Giorgio Corporation, processes fruit juices and packages condiments in Turnhout, Belgium. It buys Brazilian orange concentrate in dollars, British apples in pounds,
What was the likely impact of the strong Singapore dollar on U.S. electronics manufacturers using Singapore as an export platform? In 1994, the Singapore dollar rose by 9% in real terms against the U.S. dollar. What was the likely impact of the strong Singapore dollar on U.S. electronics manufacturers using Singapore as an export platform?