CPA REVIEWS NOTES- INTERNATIONAL FINANCE© kadenchimbi@yahoo.com ‚ 0754 327487 1 TOPIC 1: INTRODUCTION TO INTERNATIONAL FINANCE Learning objectivesAfter reading this topic you should be able to: • Understand the background of international finance • Define international finance • Explain the reason for studying international finance • Explain the roles of international financial manager • Understand the background of multinational corporations • Distinguish
Premium Economics International trade Comparative advantage
QUESTION 1: 1. If the first deposit is at 36 years and the last expected deposit is at 65 years‚ then annual deposits will be made for 30 years. Expected annual withdrawals are $90‚000 for 15 years from the retirement fund with a bank that offers compound interest of 8% annually. Calculation Present value (PV) =? Future value (FV) = (90‚000*15) = $1‚350‚000 Periodic payment amount (PMT) =? Interest rate per period (Rate) = 8% or 0.08 Number of payment periods (Nper) = 30 Using the Excel
Premium Net present value Rate of return Time value of money
investment and offers a level after-tax cash flow of $1.75 million per year for 10 years. The opportunity cost of capital is 12 percent‚ which reflects the project’s business risk. Suppose the project is financed with $5 million of debt and $5 million of equity. The interest rate is 8 percent and the marginal tax rate is 35 percent. The debt will be paid off in equal annual installments over the project’s 10-year life. A) Calculate APV.
Premium Net present value Finance Interest
CHAPTER 6: EFFICIENT DIVERSIFICATION 1.E(rP) = (0.5 16%) + (0.4 10%) + (0.10 6%) = 12.6% 2.a.The mean return should be less than the value computed in the spreadsheet. The fund’s return is 5% lower in a recession‚ but only 3% higher in a boom. The variance of returns should be greater than the value in the spreadsheet‚ reflecting the greater dispersion of outcomes in the three scenarios. b.Calculation of mean return and variance for the stock fund: (A) (B) (C) (D) (E) (F) (G) Scenario Probability
Premium Variance Standard deviation Risk
FIN370 International Financial Management Chapter 10‚ 11‚ 12 Foreign Exposure - Practice Questions 1. Economic exposure refers to: A) the exposure of a firm’s ongoing international transactions to exchange rate fluctuations. B) the exposure of a firm’s financial statements to exchange rate fluctuations. C) the exposure of a firm’s cash flows to exchange rate fluctuations. D) the exposure of a country’s national economy to exchange rate fluctuations. 2. Which of the following statement
Premium United States dollar Currency Pound sterling
Avicular Controls‚ ACI‚ should win this deal to expand its market in Asia. Based on the data provided by International Air Transport Association’s (IATA)‚ the report indicated that passenger and cargo traffic would double in Asia by the year of 2010. The increase in the demand of air transportation is an opportunity for Avicular Controls to expand the market in Asia. Not only would the deal benefit ACI from lifting its prestige‚ but also generating the long term revenue of maintenance. In addition
Premium Currency Bretton Woods system Foreign exchange reserves
assignment. Table of Contents 1. Introduction: Tanzania’s Economy 4 2. Evaluation of Tanzania’s FDI’s flow 5 3. Importance of FDI in Agriculture in the past 4 years 7 • Capital: 7 • Technology: 8 • Market Access: 8 4. Factors Impairing FDI’s in Tanzania 8 • Poor Infrastructure 8 • Capacity 8 • Bureaucracy 8 • Corruption 9 • Seasonality 9 • Access to finance 9 • Regulatory framework 9 5. Recommendation to attract more FDI’s 10 6. Conclusion 10 References. 12 1
Premium Investment Macroeconomics Foreign direct investment
street crimes. (d) All of the above 4. Various forms of white collar crimes maybe identified in the Caribbean. These include: (a) Fraud (b) Money laundering and tax evasion (c) Embezzlement and bribery (d) All of the above 5. Criminal activity is more prevalent among younger people than among order people in most societies. The reason for such trends include : (a) Young people are more likely to be unemployed in low wage jobs (b) Young people are more likely to be
Premium Crime Criminology Theft
SIBM Bangalore – MBA EE – Semester IV International Finance Take-Home Assignment - 1 – 01.05.2013 You may use the issues discussed in the case of ‘Lufthansa – to hedge or not to hedge” to submit this assignment. 1. Assume that Lufthansa placed an order to Boeing to buy 10 jets of Boeing 787-9 model on 1st December 2012. The transaction is invoiced in Euros using the spot USD-EUR exchange rate prevailing on 1st December. 2. The payment terms: Lufthansa has to make the payment in USD to Boeing
Premium Microsoft United States dollar Microsoft Office
Questions from Chapter 7 Q-2 Answer : Yes because one could purchase new zealand dollars at yardley Bank for $.40 and sell them to Beal Bank for $.401. With $1 million available‚ 2.5 million New Zealand dollars could be purchased at Yardley Bank. These New Zealand dollars could then be sold to Beal Bank for $1‚002‚500‚ thereby gener ating a profit of $2‚500. The large demand for New Zealand dollars at Yardley Bank will force this bank’s ask price on New Zealand dollar to increase
Premium United States dollar Interest rate Forward contract