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When you keep all parameters unchanged but increase K, will the cost of a European put
option increase or decrease?
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- Which of the following is the correct option: The Leontief study testing the Heckscher-Ohlin theory showed that... a) The US exported capital-intensive goods and imported labour-intensive goods.b) The US exported labour-intensive goods and imported labour-intensive goods.c) Even though the US was a capital abundant nation, it exported labour intensive goods.d) The US was a capital abundant nation and therefore, exported capital intensive goods.Why might the cost of capital for a foreign project differ from thatof an equivalent domestic project? Could it be lower?If a firm is planning for an international project, the manager should understand that the project's NPV would be ______ by the size of the initial investment and the project's required rate of return. A. positively; negatively B. positively; positively C. negatively; negatively D. negatively; positively
- When an MNC restructures its operations to reduce its economic exposure, it may sometimes forgo economies of scale. Explain. (See Ch 12, Q4)Refer to the attached diagram to answer the following question: Will the level of saving and consumption change as the economy adjusts to this change in imports? Explain.The crossover rate is 13.5252%. Explain what this rate is and how it affects the choice between mutually exclusive projects.
- A) What is the IRR for Project A and B? B) if required return is 8%, what is the NPV of project A and project B? C) at what discount rate would the company be indifferent between these 2 project?A. As an MNC, when would you use the spot rate? Explain your answer. B. If our MNC currency's is weaker, how will it impact our purchase from the foreign supplier and profits? Solve both parts Wright only as required.....plz I will up voteConsider the mutually exclusive alternatives in the shown table. Which alternative would be chosen according to these decision criteria?Solve, a. Maximum benefit b. Minimum cost c. Maximum benefits minus costs d. Largest investment having an incremental B–C ratio larger than one e. Largest B–C ratio Which project should be chosen?
- Compare and contrast the Hecksher-Ohlin theory and the increasing returns to scale theory? Clearly, a state whose theory explains trade between the US and Africa better and why.Give different discount rate to both the projects not the same depending on the international climates in both the countries USA and Europe and give the reference for thatShould firms require higher rates of return on foreign projects than on identical projectslocated at home? Explain.