Assume a U.S.-based MNC has a Chilean subsidiary that annually remits 30 millionChilean pesos to the U.S. If the peso , the dollar amount of remitted funds .a. appreciates; decreasesb. depreciates; is unaffectedc. appreciates; is unaffectedd. depreciates; decreasese. B and C

If the U.S. dollar appreciates,a. an MNC's U.S. sales will probably decrease.b. an MNC's exports denominated in U.S. dollars will probably increase.c. an MNC's interest owed on foreign funds borrowed will probably increase.d. an MNC's exports denominated in foreign currencies will probably increase.e. all of the above

Assume that the Japanese yen is expected to depreciate substantially over the next year.The U.S.-based MNC has a subsidiary in Japan, where its costs exceed revenues. The overallvalue of MNC will because of the yen's depreciation.a. Decreaseb. Increasec. remain unchangedd. A and C are possible

A firm whose home currency is the Mexican Peso (MXN) is considering an investment in the United States. The investment is expected to produce after-tax United States dollar (USD) cash flows (in millions) as follows:Year 0: -USD475Year 1: USD250Year 2: USD278Year 3: USD291Year 4: USD275The expected rates of inflation are constant at 6.55% in Mexico and 4.88% in the United States. The required returns for projects in this risk class are 16.35% in Mexico and 9.11% in the United States. The spot exchange rate is MXN22.84/USD.The project country’s government has United States dollar-denominated bonds outstanding that currently yield 4.74% per annum. The Mexican firm pays a marginal corporate tax rate of 17% on its USD profits, which is the same marginal tax rate that the firm pays on its parent company profits in the Mexican peso.The US Government has a FDI policy stipulating that for all foreign projects, the first 3 years of USD cash flows generated by the project must be loaned to the country’s government at an interest rate of 0% per annum for a period of exactly 3 years after they are generated by the project. How much financial value-add does the project provide to the MNC?Question 13Answera.MXN7,375.987 millionb.MXN7,058.005 millionc.MXN6,787.589 milliond.MXN6,381.044 millione.MXN6,792.999 million

Suppose that you are a U.S. producer of a commodity good competing with foreign producers. Your inputs of production are priced in dollars and you sell your output in dollars. If the U.S. currency depreciates against the currencies of your trading partners,Group of answer choicesyour competitive position is likely worsened.your competitive position is likely improved.none of the optionsyour competitive position is unchanged.

Based on your answer to (b), what hap-pened to the value of the U.S. dollaragainst this basket between 2009 and2010? How does this compare with thechange in the value of the U.S. dollar rela-tive to the Mexican peso? Explain youranswer