International Financial Management
14th Edition
ISBN: 9780357130698
Author: Madura
Publisher: Cengage
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Golf-Travel Inc. is a U.S. company that provides travel packages for individual golfers and corporate golf outings. The company has mainly focused on U.S. customers but has decided to expand its business globally. Ben Watson, the company’s CEO, has decided that the best location for the company’s European operations is Ireland. While Mark obviously appreciated all of the golf related history in Ireland, he was also attracted by Ireland’s low 12.5% corporate tax rate.
In January 2019, Golf-Travel formally opened its European operations, called Europe-Golf, in Portmarnock, Ireland, as a wholly owned subsidiary of Golf-Travel. During 2019, the subsidiary’s performance exceeded expectations by hosting almost 400 individual golf trips and 200 corporate outings. At the end of the year, the subsidiary reported pretax income of €324,260 and the subsidiary paid Irish taxes of €40,533, leaving a net income of €283,727.
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Ben Watson has asked you, Golf-Travel’s Chief Financial…
A U.S. firm that sells high-quality tennis racquets in the U.S., wants to expand internationally by selling them in Argentina and Brazil. Describe the tradeoffs that are involved for each method (such as exporting, direct foreign investment, etc.) that this firm could use to achieve its goal. Which method of international business in your view would be best suited for this firm? Explain why you recommend so
Explain how will the following transactions affect Bangladeshi NCO? Does this transaction affect direct investment or portfolio investment? Explain.
Pran Foods Ltd. buys stock in Amul India Private Ltd.
Walton buys parts from a Japanese manufacturer to use in the production of its refrigerators.
An US firm expands its outlets in Dhaka.
A Korean mutual fund buys shares of stock in Beximco.
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