國際金融（原書第12版） 教學(xué)課件作者 大衛(wèi).艾特曼（David Eiteman）阿瑟.斯通西 chapter 19

《國際金融（原書第12版） 教學(xué)課件作者 大衛(wèi).艾特曼（David Eiteman）阿瑟.斯通西 chapter 19》由會(huì)員分享，可在線閱讀，更多相關(guān)《國際金融（原書第12版） 教學(xué)課件作者 大衛(wèi).艾特曼（David Eiteman）阿瑟.斯通西 chapter 19（10頁珍藏版）》請?jiān)谘b配圖網(wǎng)上搜索。

1、Multinational Business Finance, 12e (Eiteman, et al) Chapter 19 Multinational Capital Budgeting 19.1 Project Versus Parent Valuation Multiple Choice 1) The traditional financial analysis applied to foreign or domestic projects, to determine the project's value to the firm is called _

2、_______. A) cost of capital analysis B) capital budgeting C) capital structure analysis D) agency theory Answer: B Diff: 2 Topic: 19.1 Project versus Parent Valuation Skill: Recognition 2) Which of the following is NOT a basic step in the capital budgeting process? A) Identify the ini

3、tial capital invested. B) Estimate the cash flows to be derived from the project over time. C) Identify the appropriate interest rate at which to discount future cash flows. D) All of the above are steps in the capital budgeting process. Answer: D Diff: 2 Topic: 19.1 Project versus Parent Va

4、luation Skill: Recognition 3) Of the following capital budgeting decision criteria, which does NOT use discounted cash flows? A) Net present value. B) Internal rate of return. C) Accounting rate of return. D) All of these techniques typically use discounted cash flows. Answer: C Diff: 2

5、 Topic: 19.1 Project versus Parent Valuation Skill: Recognition 4) Which of the following is NOT a reason why capital budgeting for a foreign project is more complex than for a domestic project? A) Parent cash flows must be distinguished from project cash flows. B) Parent firms must specific

6、ally recognize remittance of funds due to differing rules and regulations concerning remittance of cash flows, taxes, and local norms. C) Differing rates of inflation between the foreign and domestic economies. D) All of the above add complexity to the international capital budgeting process. Ans

7、wer: D Diff: 2 Topic: 19.1 Project versus Parent Valuation Skill: Recognition 5) Project evaluation from the ________ viewpoint serves some useful purposes and/but should ________ the ________ viewpoint. A) local; be subordinated to; parent's B) local; not be subordinated to; parent's C) p

8、arent's; be subordinated to; local D) none of the above Answer: A Diff: 2 Topic: 19.1 Project versus Parent Valuation Skill: Recognition 6) For financial reporting purposes, U.S. firms must consolidate the earnings of any subsidiary that is over ________ owned. A) 20% B) 40% C) 50% D)

9、 75% Answer: C Diff: 2 Topic: 19.1 Project versus Parent Valuation Skill: Recognition 7) A foreign firm that is 20% to 49% owned by a parent is called a/an ________. A) subsidiary B) affiliate C) partner D) rival Answer: B Diff: 2 Topic: 19.1 Project versus Parent Valuation Skill

10、: Recognition 8) Affiliate firms are consolidated on the parent's financial statements on a ________ basis. A) pro rated B) 50% C) 75% D) 100% Answer: A Diff: 2 Topic: 19.1 Project versus Parent Valuation Skill: Recognition 9) Given a current spot rate of 8.10 Norwegian krone per U

11、.S. dollar, expected inflation rates of 6% in Norway and 3% per annum in the U.S., use the formula for relative purchasing power parity to estimate the one-year spot rate of krone per dollar. A) 7.87 krone per dollar B) 8.10 krone per dollar C) 8.34 krone per dollar D) There is not enough inform

12、ation to answer this question. Answer: C Diff: 3 Topic: 19.1 Project versus Parent Valuation Skill: Analytical 10) When evaluating capital budgeting projects, which of the following would NOT necessarily be an indicator of an acceptable project? A) an NPV > $0 B) an IRR > the project's req

13、uired rate of return C) an IRR > $0 D) All of the above are correct indicators. Answer: C Diff: 2 Topic: 19.1 Project versus Parent Valuation Skill: Recognition 11) Given a current spot rate of 8.10 Norwegian krone per U.S. dollar, expected inflation rates of 3% in Norway and 6% per ann

14、um in the U.S., use the formula for relative purchasing power parity to estimate the one-year spot rate of krone per dollar. A) 7.87 krone per dollar B) 8.10 krone per dollar C) 8.34 krone per dollar D) There is not enough information to answer this question. Answer: A Diff: 3 Topic: 19.1 P

15、roject versus Parent Valuation Skill: Analytical 12) When determining a firm's weighted average cost of capital (wacc) which of the following terms is NOT necessary? A) The firm's tax rate. B) The firm's cost of debt. C) The firm's cost of equity. D) All of the above are necessary. Answer:

16、 D Diff: 2 Topic: 19.1 Project versus Parent Valuation Skill: Recognition 13) When determining a firm's weighted average cost of capital (WACC) which of the following terms is NOT necessary? A) The firm's weight of equity financing. B) The risk-free rate of return. C) The firm's weight o

17、f debt financing. D) All of the above are necessary to determine a firm's WACC. Answer: B Diff: 2 Topic: 19.1 Project versus Parent Valuation Skill: Recognition Instruction 19.1: Use the information to answer the following question(s). The Wheel Deal Inc., a company that produces scoote

18、rs and other wheeled non-motorized recreational equipment is considering an expansion of their product line to Europe. The expansion would require a purchase of equipment with a price of euro 1,200,000 and additional installation of euro 300,000 (assume that the installation costs cannot be expensed

19、, but rather, must be depreciated over the life of the asset). Because this would be a new product, they will not be replacing existing equipment. The new product line is expected to increase revenues by euro 600,000 per year over current levels for the next 5 years, however; expenses will also incr

20、ease by euro 200,000 per year. (Note: Assume the after-tax operating cash flows in years 1-5 are equal, and that the terminal value of the project in year 5 may change total after-tax cash flows for that year.) The equipment is multipurpose and the firm anticipates that they will sell it at the end

21、of the five years for euro 500,000. The firm's required rate of return is 12% and they are in the 40% tax bracket. Depreciation is straight-line to a value of euro 0 over the 5-year life of the equipment, and the initial investment (at year 0) also requires an increase in NWC of euro 100,000 (to be

22、recovered at the sale of the equipment at the end of five years). The current spot rate is $0.95/euro , and the expected inflation rate in the U.S. is 4% per year and 3% per year in Europe. 14) Refer to Instruction 19.1. What are the annual after-tax cash flows for the Wheel Deal project? A) €40

23、0,000 B) €240,000 C) €120,000 D) €360,000 Answer: D Diff: 3 Topic: 19.1 Project versus Parent Valuation Skill: Analytical 15) Refer to Instruction 19.1. What is the initial investment for the Wheel Deal project? A) $1,500,000 B) €1,600,000 C) $1,600,000 D) €1,500,000 Answer: A Di

24、ff: 3 Topic: 19.1 Project versus Parent Valuation Skill: Analytical 16) Refer to Instruction 19.1. What is the NPV of the European expansion if Wheel Deal first computes the NPV in euros and then converts that figure to dollars using the current spot rate? A) $1,520,000 B) $1,684,210 C) -$

25、75,310 D) -$71,544 Answer: D Diff: 3 Topic: 19.1 Project versus Parent Valuation Skill: Analytical 17) Refer to Instruction 19.1. In euros, what is the NPV of the Wheel Deal expansion? A) €1,524,690 B) $1,611,317 C) -€75,310 D) -€111,317 Answer: C Diff: 3 Topic: 19.1 Project versus

26、 Parent Valuation Skill: Analytical 18) Refer to Instruction 19.1. What is the IRR of the Wheel Deal expansion? A) 14.4% B) 10.3% C) 12.0% D) 8.6% Answer: B Diff: 3 Topic: 19.1 Project versus Parent Valuation Skill: Analytical 19) If a firm undertakes a project with ordinary cash

27、flows and estimates that the firm has a positive NPV, then the IRR will be ________. A) less than the cost of capital B) greater than the cost of capital C) greater than the cost of the project D) cannot be determined from this information Answer: B Diff: 2 Topic: 19.1 Project versus Parent

28、 Valuation Skill: Recognition 20) When estimating a firm's cost of equity capital using the CAPM, you need to estimate A) the risk-free rate of return. B) the expected return on the market portfolio. C) the firm's beta. D) all of the above Answer: D Diff: 2 Topic: 19.1 Project versus P

29、arent Valuation Skill: Recognition 21) ________ is the risk that a foreign government will place restrictions such as limiting the amount of funds that can be remitted to the parent firm, or even expropriation of cash flows earned in that country. A) Exchange risk B) Foreign risk C) Politica

30、l risk D) Unnecessary risk Answer: C Diff: 2 Topic: 19.1 Project versus Parent Valuation Skill: Recognition 22) Generally speaking, a firm wants to receive cash flows from a currency that is ________ relative to their own, and pay out in currencies that are ________ relative to their home c

31、urrency. A) appreciating; depreciating B) depreciating; depreciating C) appreciating; appreciating D) depreciating; appreciating Answer: A Diff: 2 Topic: 19.1 Project versus Parent Valuation Skill: Conceptual True/False 1) There are no important differences between domestic and inte

32、rnational capital budgeting methods. Answer: FALSE Diff: 2 Topic: 19.1 Project versus Parent Valuation Skill: Recognition 2) It is important that firms adopt a common standard for the capital budgeting process for choosing among foreign and domestic projects. Answer: TRUE Diff: 2 Topic

33、: 19.1 Project versus Parent Valuation Skill: Recognition 3) The only proper way to estimate the NPV of a foreign project is to discount the appropriate cash flows first and then convert them to the domestic currency at the current spot rate. Answer: FALSE Diff: 2 Topic: 19.1 Project vers

34、us Parent Valuation Skill: Conceptual 4) When dealing with international capital budgeting projects, the value of the project is NOT sensitive to the firm's cost of capital. Answer: FALSE Diff: 2 Topic: 19.1 Project versus Parent Valuation Skill: Conceptual Essay 1) The authors high

35、light a strong theoretical argument in favor of analyzing any foreign project from the viewpoint of the parent. Provide at least three reasons why the parent's viewpoint is superior to the local viewpoint and give an example of when the local viewpoint fails to maximize the value of the firm. Answe

36、r: A project might have a positive NPV from the local viewpoint, but fail to consider relevant cash flows from the parent viewpoint. For example, a positive NPV project in one country may result from the erosion of revenues in another. A local manager would not necessarily be expected to be aware o

37、f such erosion. It may not be possible to remit all or part of the local cash flows to the parent company and reinvestment opportunities in the local economy may be inferior to what the parent could do elsewhere, thus, a less than maximum use of funds. Political and exchange rate risk add to the unc

38、ertainty of cash flows and thus increase the required rate of return by stockholders. Cash flows may be more difficult to estimate especially long-term cash flows in lesser-developed countries. Diff: 3 Topic: 19.1 Project versus Parent Valuation Skill: Analytical 2) Explain how political ris

39、k and exchange rate risk increase the uncertainty of international projects for the purpose of capital budgeting. Answer: The evaluation of foreign projects must consider several risks that are either nonexistent or much less important in domestic capital budgeting. First, if revenues and expenses

40、 are in a foreign currency, then the parent firm must estimate the exchange rate at which the foreign currency will be converted into the domestic currency. To estimate future exchange rates, the parent firm must estimate expected rates of inflation and interest rates in both countries, economic gro

41、wth in each country, as well as consumer preferences and tastes in more than one country. Then, aspects of political risk must be considered. What is the likelihood that all or part of the cash flows accruing to the parent firm will be restricted through some political act? The firm must now conside

42、r the possibility of changing tax rates, new taxes, and additional restrictions on the flow of funds. Furthermore, local norms may differ from usual firm practice in terms of financing or dividend policy. Domestic capital budgeting may seem quite easy in comparison. Diff: 3 Topic: 19.1 Project ve

43、rsus Parent Valuation Skill: Conceptual 19.2 Real Option Analysis Multiple Choice 1) Which of the following is NOT an example of political risk? A) Expropriation of cash flows by a foreign government. B) The U.S. government restricts trade with a foreign country where your firm has in

44、vestments. C) The foreign government nationalizes all foreign-owned assets. D) All of the above are examples of political risk. Answer: D Diff: 2 Topic: 19.2 Real Option Analysis Skill: Recognition 2) Real option analysis allows managers to analyze all of the following EXCEPT: A) the opti

45、on to defer. B) the option to abandon. C) the option to alter capacity. D) All of the above may be analyzed using real option analysis. Answer: D Diff: 2 Topic: 19.2 Real Option Analysis Skill: Recognition 19.3 Project Financing Multiple Choice 1) Which of the following is NOT a

46、 factor critical to the success of project financing? A) Separability of the project from its investors. B) Long-lived and capital intensive singular projects. C) Cash flow predictability from third part commitments. D) All of the above are critical factors for project financing. Answer: D Diff: 2 Topic: 19.3 Project Financing Skill: Conceptual True/False 1) Project financing is the arrangement of financing for very large individual long-term capital projects. Answer: TRUE Diff: 1 Topic: 19.3 Project Financing Skill: Recognition