Abstract
Globalization provides access to foreign markets where goods and services can be sold in order to improve profitability and diversify the risk associated with operations. It is therefore important to understand the sense of globalization.
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Problems
Problems
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1.
Why is capital budgeting analysis so important to the firm?
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2.
What is the intuition behind the NPV capital budgeting framework?
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3.
Discuss what is meant by the incremental cash flows of a capital project.
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4.
What makes the APV capital budgeting framework useful for analyzing foreign capital expenditures?
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5.
Relate the concept of lost sales to the definition of incremental cash flow.
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6.
What problems can enter into the capital budgeting analysis if project debt is evaluated instead of the borrowing capacity created by the project?
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7.
What is the nature of a concessionary loan and how is it handled in the APV model?
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8.
What is the intuition of discounting the various cash flows in the APV model at specific discount rates?
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9.
In the Modigliani-Miller equation, why is the market value of the levered firm greater than the market value of an equivalent unlevered firm?
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10.
Discuss the difference between performing the capital budgeting analysis from the parent firm’s perspective as opposed to the project perspective.
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11.
Define the concept of a real option. Discuss some of the various real options a firm can be confronted with when investing in real projects.
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12.
How is international financial management different from domestic financial management?
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13.
How is a country’s economic well-being enhanced through free international trade in goods and services?
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14.
What are multinational corporations (MNCs) and what economic roles do they play?
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Corelli, A. (2016). International Corporate Finance. In: Analytical Corporate Finance. Springer Texts in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-39549-4_13
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DOI: https://doi.org/10.1007/978-3-319-39549-4_13
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