Universal Circuits‚ Inc. Foreign Exchange Exposure Management Due to significant appreciation of the U.S dollar against the Irish punt in recent years‚ it has come to our attention that the profit margins of our Irish operation are extremely sensitive to fluctuations in the value of the U.S dollar. With already high interest rates‚ steadying rates of inflation‚ and flat economic growth in the United States‚ it appears that the time has come to worry about the possibility of a large devaluation
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1. Does Universal Circuit’s Irish controller have a convincing argument for the weakness of the dollar? Why or why not? How do you interpret the evidence? The Irish controller certainly presented a very convincing argument. He argues that since the American trade deficit has been growing‚ the dollar will be likely to depreciate. From 1980 to 1984 the dollar appreciated against the punt by about 50% and interest rate averaged 12.6% during the same period. These high interest rates have caused
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Universal Circuits’ Case Assignment Does the Universal Circuits’ Irish controller have a convincing argument for the weakness of the dollar? Why or why not? How would you interpret the evidence? The controller of the Irish division does have a valid point when stating that the U.S. dollar is in a vulnerable position due to the fact that its trade deficit is currently in excess of $100 billion and growing. (see Exhibit 1). While Universal Circuits’ chief financial officer‚ Joe Merrill‚ is correct
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Universal Circuits Inc. Case Study Finance 405 After receiving a telex from the Controller of the Irish plant‚ who is an integral employee at Universal Circuits‚ we had to make a tough decision regarding his request to hedge against the US dollar depreciating. If the US dollar depreciates‚ manufacturing would be shifted from his Irish plant to the US plants‚ which in turn would negatively affect his potential bonus. We acknowledge this risk
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QUESTION #1 Does the Universal Circuits’ Irish controller have a convincing argument for the weakness of the dollar? Why or why not? How would you interpret the evidence? The controller of the Irish division does have a valid point when stating that the U.S. dollar is in a vulnerable position due to the fact that its trade deficit is currently in excess of $100 billion and growing. (see Exhibit 1). While Universal Circuits’ chief financial officer‚ Joe Merrill‚ is correct when stating that
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Universal Electronics Inc. Universal Electronics‚ Inc. was founded in 1986 and is currently headquartered in Cypress‚ Ca with 1‚843 employees. UEI sells pre-programmed universal wireless control products‚ including remote controls‚ wireless keyboards‚ and gaming controls in the USA‚ Europe‚ Australia‚ New Zealand‚ South Africa‚ the` Middle East‚ Mexico‚ Asia‚ and Latin America. With the development of software and firmware‚ the company’s devices can virtually control all infrared capable televisions
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Optical Distortion Inc. – Questions for Discussion 1. What characteristics of the ODI contact lens are likely to make it appealing or unappealing to different types of chicken farmers? [If desired‚ this question can be rephrased to include a specific reference to literature on diffusion of innovations.] Advantages: reduction in mortality due to cannibalism among chicken from 25% to 4‚5% decrease in egg-production loss (savings on egg-production) savings on feed expenses fast process of installing
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Circuit Board Fabricators‚ Inc. CBF hired you to help determine why it is not able to produce the 1‚000 boards per day. 1. What type of process flow structure is CBF using? 2. Diagram the process in a manner similar to Exhibit 6.7. 3. Analyze the capacity of the process. 4. What is the impact of the losses in the process in Inspection and Final Test? 5. What recommendation would you make for a short-term solution of CBF’s problems? 6. What long-term recommendations would you make.
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Answer to Questions and Problems 1) In a strain gauge bridge‚ what does (a) a negative reading on the zero centered meters imply? (b) a positive reading on the zero centered meters imply? - A negative reading on the zero centered meter implies that the strain gauge is under compression. Whereas‚ a positive reading implies that the strain gauge is under tensile / tension. 2) Beside strain gauge transducers‚ what other transducers can be used in a bridge circuit? - Besides strain gauge transducers
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Chapter 1 Answers to End of Chapter Questions 1. Agency Problems of MNCs. a. Explain the agency problem of MNCs. ANSWER: The agency problem reflects a conflict of interests between decision-making managers and the owners of the MNC. Agency costs occur in an effort to assure that managers act in the best interest of the owners. b. Why might agency costs be larger for an MNC than for a purely domestic firm? ANSWER: The agency costs are normally larger for MNCs than purely domestic firms for the following
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