Archives: Solution Manual

Case 23: What Have You Done for Me Lately? The Case of Amazon in South Carolina 1. Who is helped and who gets hurt in the use of tax incentives? Draw a stakeholder map for Amazon and the governments involved. […]

CHAPTER 11 TRANSLATION EXPOSURE 1. Translation. How do MNEs translate foreign currency into functional currency when consolidating their financial statements? Foreign currency is most commonly translated into functional currency when MNEs combine the financial statements of their subsidiaries into one […]

Case 22: General Electric and the Hudson River Cleanup 1. What are the social, ethical, and political issues in this case? Which are major and which are minor? There are several issues involved in the case. The most significant likely […]

Current spot rate ($/€) $1.4158 Credit Suisse 90-day forward rate ($/€) $1.4172 Barclays 90-day forward rate ($/€) $1.4195 Mattel Toys WACC ($) 9.600% 90-day eurodollar interest rate 4.000% Assumptions Values 90-day A/R (€) € 30,000,000.00 Current spot rate ($/€) $1.4158 […]

Case 21: McDonald’s: The Coffee Spill Heard ’Round the World 1. What are the major issues in the Liebeck case and in the following incidents? Was the lawsuit “frivolous” as some people thought, or serious business regarding safety and treatment […]

Spot rate, ¥/$ ¥111.40/$ 30-day forward rate, ¥/$ ¥111.00/$ 90-day forward rate, ¥/$ ¥110.40/$ 180-day forward rate, ¥/$ ¥109.20/$ Numata’s WACC 8.850% BioTron Medical’s WACC 9.200% Assumptions Values BioTron’s 30-day account receivable, Japanese yen 12,500,000 Spot rate, ¥/$ 111.40 30-day […]

Case 20: Big Pharma’s Marketing Tactics 1. What are the ethical issues in this case? One might be tempted to say that the primary ethical issue is unfair business practices (e.g., paying doctors to prescribe certain drugs or providing free […]

CHAPTER 10 TRANSACTION EXPOSURE 1. Foreign Exchange Exposure. Define the three types of foreign exchange exposure. The three main types of foreign exchange exposure are transaction, translation, and operating: ▪ Transaction exposure measures changes in the value of outstanding financial […]

Chapter 19 Employment Diversity and Discrimination LEARNING OUTCOMES After studying this chapter, you should be able to: 1. Discuss the concept of diversity management in the workforce and the evolution of its current paradigm. 2. Chronicle the U.S. civil rights […]

Assumptions Rate Values Initial spot rate, 1999 (Sucre/$) S1 5,000 Ending spot rate, 1999 (Sucre/$) S2 25,000 Calculation of percentage change: Percentage change in the sucre versus the dollar -80.00% Percent change = ( S1 – S2 ) ÷ ( […]

Case 19: Should Directors Shed Light on Dark Money? 1. What is your reaction to the problem of political spending? What would you do if you were the CEO of a pharmaceutical company? Would you still belong to PhRMA? Would […]

CHAPTER 9 FOREIGN EXCHANGE RATE DETERMINATION AND INTERVENTION 1. Exchange Rate Determination. What are the three basic theoretical approaches to exchange rate determination? The three major schools of thought are 1) purchasing power parity, 2) balance of payments approach, and […]

Chapter 18 Employee Stakeholders: Privacy, Safety, and Health LEARNING OUTCOMES After studying this chapter, you should be able to: 1. Articulate the concerns surrounding the employee’s right to privacy in the workplace. 2. Understand the issues surrounding workplace monitoring, including […]

Expected Chg Assumptions Values in LIBOR Principal borrowing need € 35,000,000 Maturity needed, in years 4.00 Current euro-LIBOR 0.750% Caixa Brasilia Federal‘s spread & expectation 2.500% 0.650% Caixa Brasilia Federal‘s initiation fee 2.000% Brasilao Safra Banco’s spread & expectation 3.000% […]

Case 18: The Betaseron® Decision (A) 1. What are the ethical issues in this situation? Which issues must Berlex consider first when determining how to distribute Betaseron®? Is Berlex or Chiron at fault for not being able to meet the […]

Assumptions 3-Month T-Bill 6-Month T-Bill Treasury bill, face value $10,000.00 $10,000.00 Price at sale $9,993.93 $9,976.74 b. Simple yield 0.0607% 0.2331% c. Annualized yield 0.2432% 0.4668% Annualized yield is found by compounding the simple yield by the number of periods […]

Chapter 17 Employee Stakeholders and Workplace Issues LEARNING OUTCOMES After studying this chapter, you should be able to: 1. Outline the characteristics of the new social contract between employers and employees. 2. Explain the concept of employee engagement and the […]

CHAPTER 8 INTEREST RATE RISK AND SWAPS 1. Reference Rates. What is an interest “reference rate” and how is it used to set rates for individual borrowers? A reference rate —for example, U.S. dollar LIBOR—is the rate of interest used […]

Case 17: Chiquita: An Excruciating Dilemma between Life and Law 1. Go to the ethical dilemma at the beginning of the case. Which position did you take and why? Did your position change after you read the case? I would […]

British pound futures, ¥/£ (CME) Contract = 125,000 pounds Open Maturity Open High Low Settle Change High Interest Dec-19 139.8000 140.8000 139.7000 139.7500 0.0500 140.4300 8,090 Mar-20 138.8000 139.8000 138.9000 139.3000 0.1000 141.3000 4,300 a. If Mariko, buys 5 March […]

Chapter 16 Business and Community Stakeholders LEARNING OUTCOMES After studying this chapter, you should be able to: 1. Discuss reasons for community involvement, various types of community projects, and management of community stakeholders. 2. Explain the pros and cons of […]

CHAPTER 7 FOREIGN CURRENCY DERIVATIVES: FUTURES & OPTIONS 1. Foreign Currency Futures. What is a foreign currency future? A future is an exchange-traded contract calling for future delivery of a standard amount of foreign currency at a fixed time, place, […]

Case 16: Coke and Pepsi in India: Issues, Ethics, and Crisis Management 1. Identify the ongoing issues in this case with respect to global business ethics, issue management, and stakeholder management. Rank these in terms of their priorities for Coca- […]

Value SFr. Equivalent Arbitrage funds available $1,000,000 SFr. 1,339,200 Spot exchange rate (SFr./$) 1.3392 3-month forward rate (SFr./$) 1.3286 U.S. dollar 3-month interest rate 4.750% Swiss franc3-month interest rate 3.625% Difference in interest rates ( i SFr. – i $) […]

Chapter 15 Sustainability and the Natural Environment LEARNING OUTCOMES After studying this chapter, you should be able to: 1. Discuss the concept of sustainability and its imperative. 2. Describe the natural environment, the impact of business on the natural environment, […]

Assumptions Value Charge for suite plus meals in Malaysian ringgit (RM) 1,045.00 Spot exchange rate (RM/$) 3.1350 US$ cost today for a 30 day stay $10,000.00 Malaysian ringgit inflation rate expected to be 2.750% U.S. dollar inflation rate expected to […]

Case 15: Nike, Inc. and Sweatshops 1. What are the ethical and social issues in this case? Ethical issues revolve around the issue of economic fairness: what constitutes fair compensation 2. Why should Nike and other companies be held responsible […]

CHAPTER 6 INTERNATIONAL PARITY CONDITIONS 1. Law of One Price. Define the law of one price carefully, noting its fundamental assumptions. Why are these assumptions so difficult to find in the real world in order to apply the theory? If […]

Chapter 14 Consumer Stakeholders: Product and Service Issues LEARNING OUTCOMES After studying this chapter, you should be able to: 1. Describe and discuss the two major product/service issues-quality and safety. 2. Explain the role and functions of the Consumer Product […]

Assumptions Values Singapore dollars to be exchanged SGD 1,000.00 a. What is the SGD per AUD cross rate? 1.0238 SGD per AUD = SGD/USD x USD/SGD b. How many Australian dollars will Anne get? AUD 977 Converting SGD to AUD […]

Case 14: The Waiter Rule: What Makes for a Good CEO? 1. Is character an essential ingredient in ethical leadership? Is it especially important in managers? In leadership, especially among CEOs, is character important? Why? Obviously, character is an essential […]

CHAPTER 5 THE FOREIGN EXCHANGE MARKET 1. Definitions. Define the following terms: a. Foreign exchange market. The foreign exchange market provides the physical and institutional structure through which the money of one country is exchanged for that of another country, […]

Chapter 13 Consumer Stakeholders: Information Issues LEARNING OUTCOMES After studying this chapter, you should be able to: 1. Describe the consumer movement and identify the consumer’s Magna Carta and explain its meaning. 2. Identify product information issues that are affected […]

Assumptions Value Share price, P1 HK$318.00 Share price, P2 HK$324.00 Dividend paid, D2 HK$0.00 b. And if the company paid a HK$2.50 dividend: Assumptions Value Share price, P1 HK$318.00 Share price, P2 HK$324.00 Dividend paid, D2 HK$2.50 Total shareholder return, […]

Case 13: Family Business 1. What are the ethical issues in this case? One obvious ethical issue in this case is whether Eddie should be taking advantage of his 2. Is a family business different from other types of businesses […]

CHAPTER 4 FINANCIAL GOALS AND CORPORATE GOVERNANCE 1. Business Ownership. What are the predominant ownership forms in global business? Business ownership can first be divided between state ownership and private ownership. State ownership, public ownership, is probably the largest globally. […]

Chapter 12 Business Influence on Government and Public Policy LEARNING OUTCOMES After studying this chapter, you should be able to: 1. Describe the evolution of corporate political participation, including the different levels at which business lobbying occurs. 2. Discuss corporate […]

Australia’s Current Account Australia’s Current Account Use the following balance of payments data for Australia from the IMF to answer Problems 3.1–3.4. Assumptions (million US$) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 3.1 […]

Case 12: Phantom Expenses 1. What are the ethical issues in this case? Padding expense accounts is a frequent ethical issue in business. The ethical questions are obvious. Is it ethical to misrepresent and overstate one’s expense reimbursement? If the […]

CHAPTER 3 THE BALANCE OF PAYMENTS 1. Balance of Payments Defined. What is the balance of payments? The measurement of all international economic transactions between the residents of a country and foreign residents is called the balance of payments (BOP). […]

Chapter 11 Business, Government, and Regulation LEARNING OUTCOMES After studying this chapter, you should be able to: 1. Articulate a brief history of the changing nature of the government’s role in its relationship with business. 2. Appreciate the complex roles […]

Assumptions Values Buy Canadian dollars for (CAD/£)1.7400 Which is equivalent, the reciprocal (£/CAD) £0.5747 Buy back pounds for (£/CAD) £0.5900 Which is equivalent, the reciprocal (CAD/£) 1.6949 Problem 2.1 Albert’s Trip to Canada Albert visits Toronto and buys 1.74 Canadian […]

Case 11: You Punch Mine and I’ll Punch Yours 1. What are the ethical issues in this case? The primary ethical issue in this case is billing for hours not worked. Ancillary ethical issues ethical issues. 2. What should I […]

CHAPTER 2 THE INTERNATIONAL MONETARY SYSTEM 1. The Rules of the Game. Under the gold standard, all national governments promised to follow the “rules of the game.” What did this mean? A country’s money supply was limited to the amount […]

Chapter 10 Ethical Issues in the Global Arena LEARNING OUTCOMES After studying this chapter, you should be able to: 1. Describe the ethical and social challenges faced by multinational corporations (MNCs) operating in the global environment. 2. Summarize the key […]

Percent Annual Avg Rate Percent Year (millions of EUR) Change CHF = 1 EUR (millions of CHF) Change 2015 1,000.00€ 1.05 CHF 1,050.00 CHF 2016 1,100.00€ 10.0% 1.06 CHF 1,166.00 CHF 11.0% 2017 1,250.00€ 13.6% 1.07 CHF 1,337.50 CHF 14.7% […]

Case 10: Payday Loans: A Need Product or a Scam? 1. Who are the stakeholders in this case and what are their stakes? The stakeholders are consumer/borrowers, the payday loan industry, and the regulators, the 2. Have you ever taken […]

Assumptions Value Euro funds for expenses in Japan € 17,000.00 Average exchange rate for the month (JPY = 1.00 Euro): January ¥125.18 February ¥126.17 March ¥124.38 April ¥124.95 May ¥121.76 June ¥122.71 Answers Japanese Yen proceeds from exchange by month: […]

Ch 9, Instructor’s Manual, Business & Society, Carroll 10e Chapter 9 Business Ethics and Technology LEARNING OUTCOMES After studying this chapter, you should be able to: 1. Identify and describe what the new world of Big Data is all about […]

CHAPTER 1 MULTINATIONAL FINANCIAL MANAGEMENT: OPPORTUNITIES AND CHALLENGES 1. Globalization Risks for MNEs. Was globalization responsible for the slowdown of MNE business during the financial crisis of 2008? In today’s global economy, the process that integrates world trade, links financial […]