Which of the following firms are more likely to hold NFA A. A firm who operates in a competitive industry and has done many acquisitions in recent years. B. An international firm that faces restriction in repatriating its profit back to the home country. C. A firm that has been operating for many years with stable profitability in a traditional industry. D. A firm whose operational risk is very high.

Which of the following firms are more likely to hold NFA A. A firm who operates in a competitive industry and has done many acquisitions in recent years. B. An international firm that faces restriction in repatriating its profit back to the home country. C. A firm that has been operating for many years with stable profitability in a traditional industry. D. A firm whose operational risk is very high.

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter1: Multinational Financial Management: An Overview

Section: Chapter Questions

Problem 4QA

See similar textbooks

Similar questions

In its quest for global expansion Lewis Fabrication must examine its rationales for wanting to expand into the foreign marketplace. Which one of the following is not a reason why this company would want to expand globally? * To maximize shareholder wealth To minimize risk of failure for the business To increase the revenues of the company To cut costs of production for the company To reduce risks associated with business cycle fluctuations
Which of the following is not a reason a company would be willing to accept new business at a loss? A.) The company has the expectation that certain customers can influence other potential customers. B.) The company has the expectation that it will make up for it in later years and has the expectation that certain customers can influence other potential customers. C.) The company has the expectation that its estimates will prove incorrect and that the business will result in a profit. D.) The company has the expectation that it will make up for it in later years.
Which of the following does NOT refer to the ways of how a multinational company can reduce political risk? Taking a conservative approach to investment and adjusting NPV of the project by reducing expected cash flows or by increasing the cost of capital in accordance with existing trends. Purchasing insurance policy against political risks. Acquiring minor shares in foreign corporations. Creating a joint venture with local partners or a consortium with other multinational companies.
Question #1 – What is the ‘expectations gap’? Is there even anything the accounting profession can do to close this ‘Expectations Gap’? Question #2 – To converge or not to converge, that is the question. The adoption of IFRS by U.S. companies would it easier to compare U.S. and foreign companies, as well as for U.S. companies to raise capital in foreign markets.
Which of the following would reduce a firm's WACC after tax? a. A firm invests in an average-risk project using equity, rather than debt financing. b. A supermarket chain decides to establish hardware stores which increases its systematic risk. c. A firm issues shares and uses the proceeds to pay off a bank loan. d. A firm issues bonds and uses the proceeds to repurchase stock. e. A firm significantly improves its operating cost control to boost profits.
Which of the following statements regarding forfaiting is/are accurate? A. The costs associated with forfaiting are often higher than conventional financing B. Forfaiting is typically a short-term transaction, less than one year C. Forfaiting is readily available to small businesses D. Forfaiting eliminates commercial, political, and foreign exchange risks E. Both a and d are accurate In international trade disputes, this ADR relies on a third-party doing their analysis alone and imposing a binding decision A. Arbitration B. Mediation C. Litigation D. Conciliation
1. A higher industry P/E will result in a(n)…A. Higher required returnB. Decrease in an industry’s business risk.C. Decrease in an industry’s growth rate.D. Increase in an industry’s liquidity risk.2. Industry analysis is important because…A. It is unusual for a firm in a troubled industry to perform well.B. There are substantial differences in stock market performances among industry groups.C. There is considerable dispersion in stock market performance among industry groups.D. All of the above3. Which of the following stages of the industry life cycle offers the highest potential returns.A. Start-upB. ConsolidationC. MaturityD. Relative decline cle
1. How is it possible for a firm to be profitable and still go bankrupt? Select one: a. The firm has positive net income but has failed to generate cash from operations. b. Earnings have increased more rapidly than sales. c. Sales have not improved even though credit policies have been eased. d. Net income has been adjusted for inflation. 2. Which ratio or ratios measure the overall efficiency of the firm in managing its investment in assets and in generating return to shareholders? Select one: a. Gross profit margin and net profit margin. b. Return on investment and return on equity. c. Total asset turnover and operating profit margin. d. Return on investment. 3. What is the first step in an analysis of financial statements? Select one: a. Specify the objectives of the analysis. b. Do a common size analysis. c. Check references containing financial information. d. Check the auditor’s report. 4. What information does the auditor’s report contain? Select one: a. The results of…
With more businesses operating internationally, there is potential for these businesses to seeking capital in foreign markets, as they set up shop overseas. Do you think it is in company's best interests to follow a single, worldwide set of auditing standards? Is it worth the migration? Do you think the public would care about this?
(1) Established companies tend to grow their panel of banks over time to need its expanding banking needs. Diversifying the banking panel across countries and region is important. The banking panel should have local banks, international banks and banks with specific specialisation. During periods of financial crisis, such as the Asian Financial Crisis, banks are known to have left entire markets and even region. Companies with few banks supporting them may then experience severe financial stress. Is this statement TRUE or FALSE? (2) "You must have sufficient skin in the game" in that companies must have sufficient equity before banks would lend to them. Besides the company's profitability, dividend policy of the company is also key to the bank's credit decision. Is this statement TRUE or FALSE? True False
New entrants are attracted when the organizations’ profits are well in excess of the cost of capital. At the same time the threat of entry depends on the existence of barriers to entry and the reaction of existing competitors. Analyze barriers which make the threat of entry low with examples.
Which one of the following is the best advice for the multinational corporation (MNC) that wants to structure an investment so as to minimize the chance that political risk events will adversely affect the firm? Group of answer choices a. Focus on the long term. b. Rely on common available supplies. c. Use local resources. d Refuse to bargain with the government.