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Questions and Answers
What is the corporate income tax percentage for the Brazilian subsidiary?
What is the corporate income tax percentage for the Brazilian subsidiary?
- 40%
- 25% (correct)
- 30%
- 35%
NexusTech’s effective tax rate is below 35%.
NexusTech’s effective tax rate is below 35%.
True (A)
What is the EBT in USD for the Chinese subsidiary?
What is the EBT in USD for the Chinese subsidiary?
$323
For the German subsidiary, the EBT in local currency is _____ euros.
For the German subsidiary, the EBT in local currency is _____ euros.
Match the subsidiaries with their respective EBT in USD:
Match the subsidiaries with their respective EBT in USD:
What was Blundell Biotech's consolidated earnings in 2013 in U.S. dollars?
What was Blundell Biotech's consolidated earnings in 2013 in U.S. dollars?
The exchange rate used for converting Japanese net income to USD in 2013 was 97.57¥/$.
The exchange rate used for converting Japanese net income to USD in 2013 was 97.57¥/$.
What were the consolidated earnings for Japan in 2013?
What were the consolidated earnings for Japan in 2013?
How much was Blundell Biotech's net income in the U.S. for 2014?
How much was Blundell Biotech's net income in the U.S. for 2014?
The consolidated earnings increased by $47.86M from 2013 to 2014 on a constant currency basis.
The consolidated earnings increased by $47.86M from 2013 to 2014 on a constant currency basis.
What was the percentage change in consolidated earnings from 2013 to 2014 on an actual basis?
What was the percentage change in consolidated earnings from 2013 to 2014 on an actual basis?
Blundell Biotech's consolidated earnings in 2014 totaled _______ in U.S. dollars.
Blundell Biotech's consolidated earnings in 2014 totaled _______ in U.S. dollars.
Match the following net incomes with their respective currencies:
Match the following net incomes with their respective currencies:
In 2014, the consolidated earnings for Russia were _____ million USD.
In 2014, the consolidated earnings for Russia were _____ million USD.
If the same exchange rates from 2014 were applied to both years, what would the 2013 earnings for Europe on a constant currency basis be?
If the same exchange rates from 2014 were applied to both years, what would the 2013 earnings for Europe on a constant currency basis be?
Which exchange rate would have been used to convert British net income to USD in 2014?
Which exchange rate would have been used to convert British net income to USD in 2014?
What was the change in corporate earnings from 2013 to 2014 when evaluated at the 2014 exchange rates?
What was the change in corporate earnings from 2013 to 2014 when evaluated at the 2014 exchange rates?
The total change in corporate earnings on a 'constant currency' basis from 2013 to 2014 resulted in a decrease.
The total change in corporate earnings on a 'constant currency' basis from 2013 to 2014 resulted in a decrease.
What was the net income from European operations in 2013?
What was the net income from European operations in 2013?
Match the Years with the Changes in Consolidated Earnings:
Match the Years with the Changes in Consolidated Earnings:
A portfolio that goes up 10% and then falls 10% has the same final value as before.
A portfolio that goes up 10% and then falls 10% has the same final value as before.
What is the primary effect of foreign exchange rate changes on earnings?
What is the primary effect of foreign exchange rate changes on earnings?
According to the Theory of Comparative Advantage, trade can make both trading partners better off economically.
According to the Theory of Comparative Advantage, trade can make both trading partners better off economically.
Name one benefit of specialization through international trade.
Name one benefit of specialization through international trade.
Comparative advantage assumes _______ competition and free trade.
Comparative advantage assumes _______ competition and free trade.
Match each term with its description:
Match each term with its description:
Which of the following is NOT a limitation of the Classical Comparative Advantage model?
Which of the following is NOT a limitation of the Classical Comparative Advantage model?
According to the IMF, international trade does not necessarily improve living standards in all participating countries.
According to the IMF, international trade does not necessarily improve living standards in all participating countries.
The growth of international trade since _______ has been significant.
The growth of international trade since _______ has been significant.
What is the main motivation for multinational enterprises (MNEs) to invest abroad?
What is the main motivation for multinational enterprises (MNEs) to invest abroad?
Every individual or company benefits from globalization and international trade.
Every individual or company benefits from globalization and international trade.
Name one category listed that drives multinational enterprises to invest abroad.
Name one category listed that drives multinational enterprises to invest abroad.
The first phase of the globalization process involves successful ____ operations.
The first phase of the globalization process involves successful ____ operations.
Which phase involves joint ventures and part ownership of a foreign subsidiary?
Which phase involves joint ventures and part ownership of a foreign subsidiary?
Match the following categories of international trade motives with their descriptions:
Match the following categories of international trade motives with their descriptions:
Market imperfections create additional opportunities for multinational enterprises.
Market imperfections create additional opportunities for multinational enterprises.
The lowest risk approach to international business is _____.
The lowest risk approach to international business is _____.
Study Notes
Blundell Biotech Consolidated Earnings
- Blundell Biotech’s consolidated earnings in 2013 were $834.08 million.
- Blundell Biotech’s consolidated earnings in 2014 were $881.94 million.
Constant Currency Analysis
- The change in corporate earnings on a constant currency basis from 2013 to 2014 was a 4.94% increase.
- The change in actual consolidated earnings from 2013 to 2014 was a 5.74% increase.
- The 2014 exchange rates were used for both 2013 and 2014 for the constant currency analysis.
- The change in consolidated earnings on a “constant currency” basis is $41.49 million from 2013 to 2014.
Comparative Advantage
- The theory of comparative advantage assumes free trade and perfect competition.
- The theory of comparative advantage assumes that there is no uncertainty and costless information.
- The theory of comparative advantage assumes that there is no government interference.
- The benefits of specialization are realized through international trade.
- Comparative advantage shifts over time.
Globalization and International Trade
- International trade is the exchange of goods and services between countries.
- International trade is a driver of international capital flows.
- International trade is subject to government control.
- International trade has grown tremendously since 1960.
Motives for Going International
- Market seekers seek to expand their markets to new countries.
- Raw material seekers seek to access raw materials in new countries.
- Production efficiency seekers seek to improve their production efficiency by taking advantage of lower production costs in new countries.
- Knowledge seekers seek to access new knowledge and technology in new countries.
- Political safety seekers seek to diversify their operations and reduce political risk.
The Five Step Globalization Process
- The five step globalization process starts with successful domestic operations.
- The five step globalization process then moves to international trade.
- The five step globalization process then moves to the multinational phase.
- The five step globalization process culminates in the wholly owned subsidiary abroad.
NexusTech
- NexusTech's consolidated global corporate income tax amount in USD is $5,104.
- NexusTech's effective tax rate is 34.7%
- Brazil, German, and Chinese, subsidiaries of NexusTech have an average exchange rate of R$1.8, €0.7018, and ¥7.75 respectively.
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Description
Explore the consolidated earnings of Blundell Biotech from 2013 to 2014, including insights on constant currency analysis and growth percentages. Understand the application of comparative advantage in global trade and how it relates to corporate performance. Test your knowledge on these financial concepts and their implications.
