Multinational firms, differing risk, comparison of profit, ROI, and RI. Newmann, Inc. has divisions in the United States, France, and Australia. The U.S. division is the oldest and most established of the three and has a cost of capital of 6%. The French division was started four years ago when the exchange rate for the Euro was 1 Euro = $1.34 USD. The French division has a cost of capital of 8%. The division in Australia was started this year, when the exchange rate was 1 Australian Dollar (AUD) = $0.87 USD. Its cost of capi- tal is 11%. Average exchange rates for the current year are 1 euro = $1.07 and 1 AUD = $0.74 USD. Other information for the three divisions includes: United States France Australia Long-term assets Operating revenues Operating expenses $22,048,000 $31,826,170 $26,738,330 8,798,851 AUD 4,509,628 AUD 11,422,761 euros 7,023,860 euros 4,980,290 euros 8,216,892 AUD Income-tax rate 35% 30% 20%

Multinational firms, differing risk, comparison of profit, ROI, and RI. Newmann, Inc. has divisions in the United States, France, and Australia. The U.S. division is the oldest and most established of the three and has a cost of capital of 6%. The French division was started four years ago when the exchange rate for the Euro was 1 Euro = $1.34 USD. The French division has a cost of capital of 8%. The division in Australia was started this year, when the exchange rate was 1 Australian Dollar (AUD) = $0.87 USD. Its cost of capi- tal is 11%. Average exchange rates for the current year are 1 euro = $1.07 and 1 AUD = $0.74 USD. Other information for the three divisions includes: United States France Australia Long-term assets Operating revenues Operating expenses $22,048,000 $31,826,170 $26,738,330 8,798,851 AUD 4,509,628 AUD 11,422,761 euros 7,023,860 euros 4,980,290 euros 8,216,892 AUD Income-tax rate 35% 30% 20%

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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