international finance walmart project part 4

Hansaben

Euroco is a foreign corporation that manufactures watches for sale worldwide. Euroco markets its watches in the United States through a branch sales office located in Boston. During Year 1, Euroco’s effectively connected earnings and profits are $12 million, and its U.S. net equity is $24 million at the beginning of the year, and $16 million at the end of the year. In addition, Euroco’s interest expense recorded and paid by the U.S. branch was $1,760,000 of portfolio interest paid to an unrelated foreign corporation and $800,000 of interest paid to a foreign corporation which owns 15% of the combined voting power of Euroco’s stock. During Year 2, Euroco’s effectively connected earnings and profits are $20 million, and its U.S. net equity at the end of the year is $18 million. In addition, Euroco’s U.S. branch had recorded interest paid of $640,000 paid to a U.S. corporation. Euroco is not in a treaty country. What is Euroco’s branch profits tax, if any, for Year 2? a. $6,000,000…

Company X is a U.S.-based IT company with operations and earnings in a number of foreign countries. The company's profits by subsidiary, in local currency (in millions), are shown in the following table for 2019 and 2020. Net Income Japanese Subsidiary Britih Subsidiary 2019 JPY 200 GBP 100.00 2020 JPY 1,480 GBP 108.40 The average exchange rate for each year, by currency pairs, is the following. Exchange Rate USD = 1 GBP JPY = 1 USD 2019 97.57 1.5646 2020 90.88 1.6473 Use the above data, Students answer the following questions. a. What is Company X's consolidated profits in U.S. dollars in 2019 and 2020? b. If the same exchange rates are used for both years, what is the change in corporate earnings on a "constant currency" basis? c. Using the results of the constant currency analysis in part b, is it possible to separate Company X's growth in earnings between local currency earnings and foreign exchange rate impacts on a consolidated basis?

McDonald’s conducts operations worldwide and is managed in three primary geographic segments: U.S., International Lead Markets (including Australia, Canada, France, Germany, and the UK), and High Growth Markets (including China, Italy, Korea, Poland, Russia, Spain, Switzerland, and the Netherlands). A hybrid geographic/corporate segment, Foundational Markets & Corporate, reports on the results of all other countries as well as any unallocated amounts. McDonald’s allocates resources to, and evaluates the performance of, its segments based on operating income. The asset totals disclosed by geography are directly managed by those regions and include accounts receivable, inventory, certain fixed assets, and certain other assets. Corporate assets primarily include cash and cash equivalents, investments, deferred tax assets, and other assets. Refer to the following geographic segment data (in millions) from the 2017 annual report of McDonald’s Corp.:

A multinational Corporation based in the United States of America has subsidiaries in the UK, Canada, and France. As at December 31, 2020, inter-company indebtedness were as follows:Debtors        Creditors         Amount           CurrencyUK                 Canada           1,500,000            Can$UK                   France           600,000              Euro (€)France             Canada           800,000             Can$Canada              UK                 94,000            Sterling (£)Canada             France            400,000             Euro (€)It is the policy company’s policy to net off inter-company balances to the greatest extent possible. The central treasury department is to use the following exchange rates for these purposes:US$1 =Can$1.237/€0.8620/£0.729Required:Calculate the net payment to be made between the subsidiaries after netting off inter-company balances,by presenting the payoff in a matrix/table format.

Assessing Translation Exposure Assume the euro’s spot rate is presently equal to $1.00. All of the following firms are based in New York and are the same size. While these firms concentrate on business in the United States, their entire foreign operations for this quarter are provided here. Company A expects its exports to cause cash inflows of 9 million euros and imports to cause cash outflows equal to 3 million euros. Company B has a subsidiary in Portugal that expects revenue of 5 million euros and has expenses of 1 million euros. Company C expects exports to cause cash inflows of 9 million euros and imports to cause cash outflows of 3 million euros, and will repay the balance of an existing loan equal to 2 million euros. Company D expects zero exports and imports to cause cash outflows of 11 million euros. Company E will repay the balance of an existing loan equal to 9 million euros. Which of the five companies described here has the highest degree of translation exposure?

Newberry, Inc., whose reporting currency is the U.S. dollar ($), has a subsidiary in Argentina, whose functional currency also is the $. The subsidiary acquires inventory on credit on November 1, 2017, for 100,000 pesos that is sold on January 17, 2018, for 130,000 pesos. The subsidiary pays for the inventory on January 31, 2018. Currency exchange rates are as follows:Cost of goods sold . . .. LCU 5,000,000Beginning inventory . . . . . . . 500,000Ending inventory . . . . . . . . . . 600,000November 1, 2017 . . . . $0.16 = 1 pesoDecember 31, 2017 . ......  . . 0.17 = 1January 17, 2018 . . . . . . . . . 0.18 = 1January 31, 2018 . . . . . . . . 0.19 = 1What amount does Newberry’s consolidated income statement report for cost of goods sold for the year ending December 31, 2018?a. $16,000.b. $17,000.c. $18,000.d. $19,000.

! Required information Newberry, Inc., whose reporting currency is the U.S. dollar ($), has a subsidiary in Argentina, whose functional currency also is the $. The subsidiary acquires inventory on credit on November 1, 2017, for 210,000 pesos that is sold on January 17, 2018, for 243,000 pesos. The subsidiary pays for the inventory on January 31, 2018. Currency exchange rates are as follows: $0.54 =1 peso November 1, 2017 December 31, 2017 0.55 =1 January 17, 2018 January 31, 2018 0.56 =1 0.57 =1

ABC Trading Company of Singapore purchases spices in bulk from around the world, packages them into consumer size quantities and sells them through sales affiliates in Hong Kong and the Unites States. For a recent month, the following payments matrix of inter-affiliate cash flows, stated in Singapore dollars, was forecasted. ABC Trading Company Payments Matrix (S$000) Receipts by: Singapore Hong Kong U.S. S$170,000 S$152,000 S$405,000 Disbursements by: S$322,000 Singapore 16 22 Hong Kong 80 50 Calculate, in Singapore dollars, the amount that the inter-affiliate foreign exchange transaction will be reduced by with multilateral netting. U.S. 110 44

A​ U.S.-based multinational company has two​ subsidiaries, one in Mexico​ (local currency, Mexican​peso, MP) and one in Japan​ (local currency,​ yen, ¥). Forecasts of business operations indicate the following​ short-term financing position for each subsidiary​ (in equivalent U.S.​ dollars): ​Mexico:$80 million excess cash to be invested​ (lent) ​Japan: $60 million funds to be raised​ (borrowed)                                                                Currency Item US​ $ MP ¥ Spot exchange rates   MP11.60​/US$ ​¥108.25​/US$ Forecast percentage change   −3.00% +1.50% Interest rates       Nominal       Euromarket 4.00%    6.20%    2.00% Domestic 3.75%    5.90%    2.15% Effective       Euromarket                                        Domestic                              Euromarket and the domestic​ market; then indicate where the funds should be invested and raised.…

Balance-of-payments double-entry bookkeeping. Show how the following transactions should be recorded in the U.S. balance of payments using a double-entry accounting system: ■ Newmont Mining—a U.S. mining concern—exports $400 million worth of copper to China and is paid in the form of a payment drawn on a U.S. bank. ■ DuPont expands its plastics manufacturing capacity in its Polish plant by investing $250 million financed by a dollar bond issue in London (United Kingdom). ■ The central bank of the People’s Bank of China purchases $2.5 billion in the foreign exchange market to slow down the appreciation of the renmimbi. The dollars are invested in five-year U.S. Treasury bonds. ■ The U.S. government provides food assistance to Sudanese refugees in the amount of $25 million worth of flour.

New Life is a multinational distribution company that started operating a Branch in Barbados on1 January 2023. The company’s Head Office is in the Cayman Islands and is part of a group whichearns more than USD 850 million for the year. It employed some of its staff from Barbados and imports good and services from the US, Cayman Islands, and other Caribbean countries. New Life repatriation policy is to transfer 50 % to 70% of its after-tax profits to the Cayman Islands.The company was of the view that for the first year of operation there was a window of no taxobligations. In December 2023, the company realized that their understanding was not correct and therefore engaged UWI Tax Consulting Services Limited to provide tax advisory and tax compliance services. Your Group was assigned this engagement. Required.Advice New Life of the tax matters that needs to be considered when operating in Barbadosincluding any tax benefits or incentives they may consider.

Newberry, Inc., whose reporting currency is the U.S. dollar ($), has a subsidiary in Argentina, whose functional currency also is the $. The subsidiary acquires inventory on credit on November 1, 2017, for 100,000 pesos that is sold on January 17, 2018, for 130,000 pesos. The subsidiary pays for the inventory on January 31, 2018. Currency exchange rates are as follows: November 1, 2017 $0.16 = 1 peso December 31, 2017 0.17 = 1 January 17, 2018 0.18 = 1 January 31, 2018 0.19 = 1   LO 8-2, 8-3       What amount does Newberry’s consolidated balance sheet report for this inventory at December 31, 2017?           $16,000.           $17,000.           $18,000.           $19,000.

Newberry, Inc., whose reporting currency is the U.S. dollar ($), has a subsidiary in Argentina, whose functional currency also is the $. The subsidiary acquires inventory on credit on November 1, 2017, for 100,000 pesos that is sold on January 17, 2018, for 130,000 pesos. The subsidiary pays for the inventory on January 31, 2018. Currency exchange rates are as follows: November 1, 2017 $0.16 = 1 peso December 31, 2017 0.17 = 1 January 17, 2018 0.18 = 1   What amount does Newberry’s consolidated income statement report for cost of goods sold for the year ending December 31, 2018? $16,000. $17,000. $18,000. $19,000.

Suppose that Canton Co. is a U.S.-based MNC with a foreign subsidiary in Germany, which deals in euros. The local earnings of this German subsidia over a two-year period are shown in the following table, along with the weighted average exchange rate of the euro and the translated U.S. dollar earnings of the subsidiary. Period Year 1 Year 2 Local Earnings of German Subsidiary (Euros, Millions) 20 20 Translated U.S. Dollar Earnings of Weighted Average Exchange German Subsidiary Rate of Euro $1.20 $1.00 (Dollars, Millions) $24.00 $20.00 Suppose that Canton has no earnings from the U.S. and all of it's earnings come from the consolidated earnings from the German subsidiary. Also suppose that the price of Canton stock is approximately equal to the mean P/E ratio in the industry multiplied by Canton's EPS. With these assumptions, the Consolidated Earnings (Euros, Millions) Period EPS (based on 10 million shares) Mean P/E Ratio (Dollars, Valuation of Canton Stock Millions) Price Year 1 Year 2…