International Financial Management
14th Edition
ISBN: 9780357130698
Author: Madura
Publisher: Cengage
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Students have asked these similar questions
Which of the following best represents the primary economic and financial benefit to the U.S. from NAFTA?
It led to increased tariffs on U.S. exports to Canada and Mexico.
U.S. consumers had access to a wider variety of products.
It resulted in the relocation of major U.S. corporations to Europe.
The U.S. benefited from low-price manufacturing, low-priced labor, and reduced shipping and logistics costs.
Which of the following condition that is likely to force the U.S. firms to establish a subsidiary in the foreign country even if production costs are higher in a foreign country.
A.
The host government of that country increases all quotas.
B.
The host government of that country eliminates all quotas.
C.
The host government of that country eliminates all tariffs.
D.
The host government of that country reduces all quotas.
Do you think that a U.S. firm can experience political risk problems in its overseas projects because of the U.S. government?
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- how economic currency exposure can affect an Australian based company with significant exports to Argentina and significant imports from Germany.arrow_forwardSuppose a U.S. firm builds a factory in China, staffs it with Chinese workers, uses materials supplied by Chinese companies, and finances the entire operation with a loan from a Chinese bank located in the same town as the factory. This firm is most likely trying to greatly reduce, or eliminate, which one of the following? Interest rate disparities Short-run exposure to exchange rate risk Long-run exposure to exchange rate risk Political risk associated with the foreign operations Translation exposure to exchange rate riskarrow_forwardWhich of the following is an example of managing economic exposure by flexible sourcing policy? An American company sells its products in Brazil and Portugal. Reduced sales in Brazil due to the dollar appreciation against the “real” can be compensated by increased sales in Portugal due to the dollar depreciation against the euro. If yen is strong, it is preferable for a Japanese company to open a manufacturing subsidiary in the U.S. to produce and sell its products there. An American IT company hires software developers in Ukraine because of the weak position of grivna against dollar. A Canadian company spends a lot of money for research & development activities to improve its reputation and gain more customers.arrow_forward
- Do you agree with the following claim? “U.S. companies with global operations can give you international diversification.” Think about both business risk and foreign exchange risk.arrow_forwardWhich of the following is not a reason for U.S. firms operating in foreign markets? A.Better economic and political environment (in the U.S.) B.Less expensive labor C.Tax incentives D. To achieve international diversificationarrow_forward
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