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F. Naz
F. Naz, B.Com
Category: Multiple Problems
Satisfied Customers: 5253
Experience:  have completed B.Com and CA Finalist
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Select a U.S. multinational company, and respond to the

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Select a U.S. multinational company, and respond to the following questions: In terms of currency denomination, describe how the firm prices its revenues and costs. For multinational enterprises (MNEs) with multiple foreign operations, consider any 2 of
those operations and the contribution they are making to the parent firm's profits. What means do they use to hedge against exchange rate risk? Using this information, what do you think would be the effect of increases or decreases in the dollar’s exchange
value on the firm’s profitability? Be sure to show all applicable work. The company I chose was Baskin-Robbins
Submitted: 1 year ago.
Category: Multiple Problems
Expert:  Mr. Gregory White replied 1 year ago.

Hello, my name is Greg.

Is there any other information you can send to see if I can assist on it this for you? If you have any documents you can upload, you can do so to mediafire.com or box.com and share the link here with us.

If I had a model and could provide that as a model (would have to check files to see if I have one), would that be sufficient or are you seeking a fully written new model document?

Customer: replied 1 year ago.
I am struggling with trying to find detailed information. I will send what I can find this evening
Expert:  Mr. Gregory White replied 1 year ago.

Thanks. I will await and see if I have what is needed.

Customer: replied 1 year ago.
The professor has no model example. This is what he sent me to help.In the United States, multinational corporations (MNC) and multinational enterprises (MNE) have been strategically been shifting their income, assets and making deals to benefit the MNC overall performance. Economic motives for moving their headquarters to a foreign country away from the United States are:Demand side benefits of tapping a foreign market and creating an increase market share.
Supply side benefits including cost factors such as reduced labor costs and favorable governmental policies on taxation and trade regulations.Even so, these MNC’s or MNE’s need to worry about the net cash flow back to the parent company. They need to worry about currency exchange risk and the effect of increases and decreases in the currency exchange rate and value of the dollar on the firm’s profitability. MNC ‘s or MNE’s who set up operating facilities in other countries select a method to price the revenues and costs generated by that foreign operation.When they take payments in dollar or the home currency of the MNC or MNE, the revenues received will not change when there is a change in the value of the dollar. If they take payment in local currency, then, when the value of the dollar appreciates (depreciates), the dollar value of those local currency revenues will fall (rise). Thus, an appreciation of the dollar for an MNC or MNE that prices its output into the market in terms of local currency will adversely affect the profit of the MNC or MNE.When they make payments in dollars to cover the costs of operations, the cash outflow will not be affected by a change in the value of the dollar. Most MNC’s or MNE’s using labor intensive methods of production and making extensive use of local sources of material will probably be paying most of its costs in local currency. As the dollar appreciates (depreciates), their cost of operation will fall (rise) and the profits of the firm will rise (fall) from the change in the value of the dollar.When both revenues and costs are in local currency, the net cash flow from the foreign operation to the home country will change in proportion to the change in the value of the dollar. A given amount of repatriated earnings or profits in the local currency will be lower when converted to dollars if the dollar appreciates and higher if the dollar depreciates. The net cash flow back to the parent company is what the MNC or MNE is concerned about. It is for this reason that many MNC’s or MNE’s hedge their expected revenues and costs with appropriate forward markets, futures, options, and swaps.SHAPIRO, A. C. (1975). EXCHANGE RATE CHANGES, INFLATION, AND THE VALUE OF THE MULTINATIONAL CORPORATION. Journal of Finance, 30(2), 485-502
Customer: replied 1 year ago.
I just need a little foundation and then I can figure out the rest. The first question or requirement is killing me.
Expert:  Mr. Gregory White replied 1 year ago.

After going through my resources, I do not have what is necessary to complete at this time.

I am opting out and opening up to the other professionals and messaging a couple who might be able to help.

Someone should be with you shortly.

Expert:  F. Naz replied 1 year ago.

Please provide data and also mention deadline and length of answer in word limit or page length.

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