any (a U.S.-based company) has a subsidiary in Canada that began operations at the start of 2020 with assets of 142,000 Canadian dollars (CAD) and liabilities of CAD 74,000. During this initial year of operation, the subsidiary reported a profit of CAD 36,000. It distributed two dividends, each for CAD 6,000 with one dividend declared o

3.     Hanson Mills,, a U.S.-based MNC has a foreign subsidiary that earns $1,050,000 before local taxes, with all the after tax funds to be available to the parent in the form of dividends. The foreign income tax rate is 30%, the foreign dividend withholding tax rate is 15% and the firm's U.S. tax rate is 35%. What are the funds available to the parent MNC if no tax credits are allowed? A)   $624,752 B)    $425,250 C)    $406,088 D)   $735,000

White Perfect Berhad, a Malaysian listed company, has regular acquisitions of silver from a Japanese supplier. Therefore, White Perfect Berhad designates a future purchase of silver as a hedged item in a cash flow hedge. On 1 January 2017, White Perfect Berhad purchased the silver. On the same date, a cumulative gain on the hedging instrument of RM6 million had been credited to other comprehensive income. At the year end of 31 December 2017, the carrying amount of the silver was RM16 million and its net realizable value was RM12 million. The silver was finally sold on 31 March 2018 for RM12.4 million. Required: Show how White Perfect Berhad should recognize and measure the cash flow hedge for the year 2017. and 2018.

Shott, a public limited company, set up a wholly owned foreign subsidiary company, Hammer, on 1 June 1999 with a share capital of 400 000 ordinary shares of 1 dinar. Shott transacts on a limited basis with Hammer. It maintains a current account with the company but very few transactions are processed through this account. Shott is a multinational company with net assets of £1500 million and ‘normal’ profits are approximately £160 mil- lion. The management of Hammer are all based locally although Shott does have a representative on the management board. The prices of the products of Hammer are deter- mined locally and 90% of sales are to local companies. Most of the finance required by Hammer is raised locally, although occasionally short term finance is raised through bor- rowing monies from Shott. Hammer has made profits of 80 000 dinars and 120 000 dinars after dividend payments respectively for the two years to 31 May 2001. During the financial year to 31 May 2001, the following…

1. ForCo, a corporation that is incorporated in a foreign country that does not have a treaty with the United States, plans to conduct manufacturing, marketing, and sales operations in the United States.  These U.S. operations produce $5 million of earnings & profits in Year 1.  Assume further that the U.S. operations will have a net worth of $17 million at the beginning of Year 1 and $20 million at the end of Year 1.  During Year 2, the U.S. branch does not produce any earnings & profits and its net worth is $20 million at the beginning of the year and $10 million at the end of the year.  For branch profits tax purposes in Year 1, the dividend equivalent amount (“DEA”) for the U.S. branch is as follows: a. $1.5 million. b. $2.0 million c. $10 million. $20 million. d. $25 million. 2. For branch profits tax purposes in Year 2, the DEA for the U.S. branch is as follows: a. $2 million. b. $3 million. c. $10 million. d. $20 million. e. $25 million.…

Sunrise Manufacturing, Inc. Sunrise Manufacturing, Ic., a U.S. multinational company, has the following debt components in its consolidated capital section, E. Sunrise's shareholders' equity is $40,000,000 and its finance staff estimates their cost of equity to be 20.0%. Current exchange rates are also listed in the table. Income taxes are 40% around the world after allowing for credits. Calculate Sunrise's weighted average cost of capital. Are any assumptions implicit in your calculation? What is Sunrise's weighted average cost of capital? % (Round to two decimal places.) - X Data table Assumption Value Tax rate 40% $10,000,000 25-year US$ bonds 5-year US$ bonds 10-year eurobonds (euros) $6,000,000 €9,000,000 20-year yen bonds (yen) Pre-tax cost of 25-year US$ bonds Pre-tax cost of 5-year US$ bonds Pre-tax cost of 10-year eurobonds Pre-tax cost of 20-year yen bonds Spot rate ($/€) Spot rate ($/£) Spot rate (¥/$) ¥800,000,000 7.5% 4.5% 6.0% 4.0% 1.2700 1.9200 107.00 Click on the icon…

Lefty Inc. sells its products to customers residing in Country X and Country Y. Both foreign jurisdictions have a 20 percent corporate income tax. This year, Lefty made more than $30 million of sales in both Country X and Country Y. However, it paid income tax only to Country X. What factors could account for this result?

Stiff Sails Corporation, a U.S. company, operates a 100%-owned British subsidiary, SeaBeW Corporation. The U.S. dollar is the functional currency of the subsidiary. Financial statements for the subsidiary for the fiscal year-end December 31, 2024, are as follows: Sales Cost of Goods Sold Beginning Inventory Purchases Cost of Goods Sold Depreciation B. Goods Available For Sale Less: Ending Inventory Selling and Admin. Expenses Income Taxes Net Income Current Assets Cash Accts. Rec. Inventories Required: A. SeaBeWe Corporation Income Statement 155,000 171,000 285,000 611,000 SeaBeWe Corporation Partial Balance Sheet 310,000 265,000 575,000 285,000 290,000 79,000 155,000 32,000 July 1, 2022 Jan. 1, 2024 June 30, 2024 Dec. 31, 2024 Average for 2024 1. Cost of Goods Sold. 2. Depreciation Expense. 3. Equipment. Other Information: 1. Equipment costing 340,000 pounds was acquired July 1, 2022, and 38,000 was acquired June 30, 2024. Depreciation for the period was as follows: Pounds 650,000…

Hw.10.

Nexus Tech's Earnings and the Fall of the Dollar. Nexus Tech is a U.S.-based multinational manufacturing firm with wholly-owned subsidiaries in Brazil, Germany, and China, in addition to domestic operations in the United States. Nexus Tech is traded on the NASDAQ. Nexus Tech currently has 652,000 shares outstanding. The basic operating characteristics of the various business units is as follows: Nexus Tech must pay corporate income tax in each country in which it currently has operations. a. After deducting taxes in each country, what are Nexus Tech's consolidated earnings and consolidated earnings per share in U.S. dollars? The dollar has experienced significant swings in value against most of the world's currencies in recent years. b. What would be the impact on Nexus Tech's consolidated EPS if all foreign currencies were to appreciate 18% against the U.S. dollar? c. What would be the impact on Nexus Tech's consolidated EPS if all foreign currencies were to depreciate 18% against the…