ECON 4131, International Finance, Spring 2002, Exam 2 Essays -- UMN Mi

Midterm Exam International Finance April 7, 2004 Answer all questions in examination booklets 1. (15 points) Define the following a) The â€Å"spot† exchange rate b) The â€Å"forward† exchange rate c) A capital account â€Å"surplus† d) Currency depreciation e) Arbitrage 2. (10 points) Briefly discuss the essential features of forward contracts, currency futures, and currency options. 3. (15 points) Use the BOP accounts guide on the last page of this exam to indicate where each of the following transactions should be recorded in the U.S. balance of payments (e.g.: â€Å"i3†, â€Å"e2†, etc.). Bear in mind that each transaction should generate a capital account and a current account entry. a) A Canadian firm buys a $75 million jet from the American company Boeing, which it pays for with a check drawn on Banc du Quebec b) Cargill (out of Mpls.) buys $10m. of Canadian wheat, which it pays for with a check drawn on Twin Cities Federal c) An American...

The Reason for Freedom of Religion Essay -- United States Constitution

Religious influence in the adoption and development of law is contradictory to the structure of the American government and way of life. We are all familiar with the phrase; â€Å"My fellow Americans†, these are words we probably have heard many times before, Presidents have uttered them in addressing the nation, they always have the same connotation every time they are spoken, that all of us are Americans, notice please that the statement is not My fellow Christians. That’s because being an American does not automatically indicate being a Christian, one of the reasons this is such a great country is that we have specific rights guaranteed by our government, such as the right to free speech, the right to bear arms, freedom of the press and as important as any†¦.Freedom of religion. I am not a religious person, I cannot remember a time when I ever truly was, even when the central component of my parents teaching and family interaction was religious belief. I never felt it was logical to proclaim unfettering belief; it just wasn’t an investment I could make in good conscience. I agree somewhat with Karl Marx who wrote: Religious distress is at the same time the expression of real distress and the protest against real distress. Religion is the sigh of the oppressed creature, the heart of a heartless world, just as it is the spirit of a spiritless situation. It is the opium of the people. The abolition of religion as the illusory happiness of the people is required for their real happiness. The demand to give up the illusion about its condition is the demand to give up a condition which needs illusions.1 though I do not believe the removal of religion is key to alleviating the condition, It is my conjecture that religious practice will di... ...r be allowed to corrupt, government in order to protect religion and liberty. And in the hopes that never again will â€Å"You shall have no other gods before me† (Exodus 20:3)5 be used as reasoning for ethnic and religious cleansing. Works Cited 1. Marx, Karl, and Joseph J. O'Malley. Critique of Hegel's 'philosophy of Right'. Cambridge [Eng.: University Press, 1970. Print. 2. "Code of Ur-Nammu." Online liberty library.org. Liberty Fund, 05Dec2010. Web. 6 Dec 2010. . 3. Mount, Steve. "The United States Constitution." USConstitution.net. U.S. Constitution.net, APR 1997. Web. 5 Dec 2010. http://www.usconstitution.net/const.html#Am1 4. Baroja, Julio Caro. The World of the Witch. 1st ed. 1. America: Phoenix Press, 2001. 125. Print. 5. Exodus 20:3 The Bible King James Version

Management Consultancy – Solutions Manual Chapter 19

MANAGEMENT CONSULTANCY – Solutions Manual CHAPTER 19 SOURCES OF INTERMEDIATE AND LONG-TERM FINANCING: DEBT AND EQUITY I. Questions 1. The bond agreement specifies such basic items as the par value, the coupon rate, and the maturity date. 2. The priority of claims can be determined as follows: senior secured debt, junior secured debt, senior debenture, subordinated debenture, preference shares, ordinary shares. 3. Bond conversion. 4. The advantages of debt are: a. Interest payments are tax deductible. b. The financial obligation is clearly specified and of a fixed nature. . In an inflationary economy, debt may be paid back with cheaper pesos. d. The use of debt, up to a prudent point, may lower the cost of capital to the firm. The disadvantages are: a. Interest and principal payment obligations are set by contract and must be paid regardless of economic circumstances. b. Bond indenture agreements may place burdensome restrictions on the firm. c. Debt, utilized beyond a given po int, may serve as a depressant on outstanding ordinary shares. 19-1 Chapter 19 Sources of Intermediate and Long-term Financing: Debt and EquityII. Multiple Choice 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. D D D B A C C E D B C D D A D 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. D C B A C A C B B B A A C C B 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. A C D A C C A A D C C A D B C Supporting computations: 16. Px = where Px Po N S = = = = value of a share5 (Po x N) + ex-rights market value of share rights-on N + 1 number of rights required to purchase one share subscription price per share Hence, Px = = = P72 360 (P75 x 4) + P60 5 the term loan: 5 18.The following schedule applies for Beginning Balance P5000 Interest x (1 – Tc ) P195 19-2 Principal Payment P1000 Ending Balance P4000 Year 1 Sources of Intermediate and Long-term Financing: Debt and Equity Chapter 19 2 3 4 5 4000 3000 2000 1000 156 117 78 39 1000 1000 1000 1000 3000 2000 10 00 -0- The present value of interest after taxes at 12% is calculated to be P453. 49. 19. After the tax benefit, the annual cost of leasing is P1,400 (1 – . 35) = P910. The present value annuity factor for four years at 12% is 3. 0373.The present value cost of the lease is the cost of the first payment plus the present value of the four future payments, or P910 + P910 (3. 0373) = P3,673. 94. 20. The present value annuity factor for five years at 12% is 3. 6048. Therefore, the present value of principal payments is P1,000 (3. 6048) = P3,604. 80. The present value cost of the purchase option is the present value of principal payments or P3,604. 80 plus P453. 49 which equals P4,058. 29. III. Problems PROBLEM 1 (CAM FURNITURE COMPANY) a. Proposal 1: 10 year 12 percent bonds CAM FURNITURE COMPANY 19-3Chapter 19 Sources of Intermediate and Long-term Financing: Debt and Equity Income P30,000 Statement For the Year Ended December 31, 2005 3* Estimated sales levels Sales†¦Ã¢â‚¬ ¦ †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. P400,000 P600,000 P800,000 540,000 720,000 Operating costs †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 360,000 Operating income †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 40,000 60,000 80,000 14,000 14,000 Interest charges †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 14,000 Net income before taxes †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 26,000 46,000 66,000 23,000 33,000 Income taxes †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 3,000 P 23,000 P 33,000 Net income†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. P 13,000 Outstanding shares = = 10,000 * EPS (P36 market value – price earnings ratio of 12) Earnings per share P1. 30 Price-earnings ratio 10 times Estimated market value P100,000 P13 33 – 1/3 Proposal 2: Ordinary share issue to yield P33-1/3 P2. 30 10 times P23 P3. 30 10 times P33 CAM FURNITURE COMPANY Income Statement For the Year Ended December 31, 2005 Sales†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. Operating costs †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ Operating income †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦..Interest charges †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ Net income before taxes †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. Income taxes †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. Net income†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. Outstanding shares = Estimated sales levels P400,000 P600,000 P800,000 540,000 720,000 360,000 40,000 60,000 80,000 2,000 2,000 2,000 38,000 58,000 78,000 29,000 39,000 19,000 P 29,000 P 39,000 P 19,000 + 10,000 = 13,000 shares Earnings per share Price-earnings ratio Estimated market value P1. 46 12 times P17. 52 19-4 P2. 23 12 times P26. 76 P3. 00 12 times P36. 00Sources of Intermediate and Long-term Financing: Debt and Equity Chapter 19 b. Within the c onstraints of this problem, two possible objectives emerge: profit maximization as measured by earnings per share and wealth maximization as measured by the price of the ordinary shares. If profit maximization is used, the firm should choose to finance the new product by selling bonds, since earnings per share is higher for each of the three levels of sales. On the other hand, wealth maximization would require the sale of new ordinary shares because share price is higher at each sales level.Wealth maximization is the preferred criterion for financial decision making. Unlike profit maximization, it represents a measure of the total benefits stream to be enjoyed by the shareholders, adjusted for both the timing of benefits and the risk associated with the receipt thereof. A criterion that ignores these two important determinants of value cannot be expected to provide a proper guide to decision making. Because wealth maximization is the preferred objective, the sale of ordinary shares is the recommended financing technique. c.Proposal 2 would still be the choice, because the market value remains above that of Proposal 1. The difference is getting smaller, however, which means that Proposal 1 would become attractive if sales reached a higher level (approximately P1. 6 million). d. The investment banker would suggest that lower price-earnings ratio with debt financing is a reflection of the greater returns demanded by shareholders in compensation for the variability in earnings and higher risk of bankruptcy created by the fixed commitment to pay debt interest and principal.PROBLEM 2 (FAYE INDUSTRIES, INC. ) Faye Industries Inc. Pro Forma Consolidated Income Statement Including Earnings per Common Share and Return on Average Common Shareholders’ Equity For the Year Ending November 30, 2006 (P000 omitted except per share amounts) (1) Issuing (2) Selling Long-term Preference (3) Selling Ordinary 19-5 Chapter 19 Sources of Intermediate and Long-term Financing: D ebt and Equity Bonds P12,978 1,273 1,530 2,083 10,175 4,070 6,105 Shares P12,978 1,273 1,273 11,705 4,682 7,023 1,658 5,365 55,028 P60,393 Shares P12,978 1,273 1,273 11,705 4,682 7,023Earnings before interest and taxes Interest on Current debt (P13,395 x 9. 5%) Alternative 1 (P15,300 x 10%) Total interest Income before income tax Income taxes (40%) Net income Preference share dividends (P15,300,000 P120) x 13% Earnings available to common shareholders Add: Common shareholders’ equity December 1, 1999 Equity financing Common shareholders’ equity November 30, 2000 Average common shares outstanding (in thousands) December 1, 1999 balance Additional issued December 1 Total (and average) shares outstanding Pro forma earnings per share (P6,105 P0) 26,330 (P7,023 P1,658) 26,330 (P7. 23 P0) 33,980 6,105 55,028 P61,133 7,023 55,028 15,300 P77,351 26,330 26,330 26,330 26,330 26,330 7,650 33,980 = = = P0. 2319 P0. 2038 P0. 2067 Estimated return on average common shareholders†™ equity P6,105 [(P55,028 P61,133) 2] = P5,365 [(P55,028 P60,393) 2] = P7,023 [(P70,328 P77,351) 2] = 10. 51% 9. 30% 9. 511% 19-6

Chapter Review and Trace Essay

1. What are the five elements in the rhetorical situation? The five elements in the rhetorical situation are Text, Reader, Author, Constraints, and Exigency. 2. How can a reader use the rhetorical situation to analyze an argument essay? How can a viewer use the rhetorical situation to analyze an image? How can a writer use the rhetorical situation during the planning phase of writing a paper? In an argument essay using the rhetorical situation to analyze the essay will give the exact points of the subject, clearly define the intended audience of the essay, while seeing the authors argument on the particular subject and their position, motives, or degree of expertise. It will keep focus on the events or circumstances that cause analysis to reactions to the situations that lead to the argument, and clearly see the controversy or problem that needs attention in the first place. In analyzing an image, rhetorical analysis will help highlight what stands out about the image, how the text if there is a text ties into the influence of the argument of the image, and how the author of the image feels. A writer can use the rhetorical situation when planning phase of writing a paper to help think critically and make decisions about the writing. Focusing on what is the motivation and who needs to read the argument will help pick the influences and ways to persuade the reader. Deciding how to illustrate the attitudes, beliefs, or afflictions is important to keep the reader’s attention. 3. Why is the audience important in argument? What types of positions might an audience initially hold? What possible outcomes are associated with arguments directed to each of these audiences? The audience is important in order to create common ground and achieve some definable audience outcomes. The audience may initially be a friendly audience, an undecided audience, a neutral audience, a hostile audience, an unfamiliar audience, or a linked audience. Possible outcomes are convincing people to your cause, pushing people away from your cause to the opposing side, people could remain bias, and people could become angry and/or violent towards you and your argument. 4. What is a discourse community? To what discourse communities do you belong? How does a discourse community help establish common ground for its members? A discourse community is a group of people who share a set of discourses, understood as basic values and assumptions, and ways of communicating about those goals.  It helps to establish common ground for its members by having resources and peers interested and sharing in the same beliefs and ideals and having peers to converse with to learn and research subject matter that all or most members enjoy and share interest in. 5. What is the universal audience? What are the special qualities of this audience? Why is it a useful idea? The universal audience is an imagined audience that serves as an ethical and argumentative test for the rhetor. The universal audience is educated, reasonable, normal, adult, and willing to listen. It is especially useful when the audience is largely unknown and you cannot obtain much information about them.

Felony Inmates Reintegration Back Into Society Essay

Felony Inmates Reintegration Back Into Society - Essay Example There are various felony crimes that could be committed and that have been committed. According to Criminal Law Attorney, felony crimes constitute offenses which are more serious and heavier than misdemeanor crimes like public intoxication and petty theft (2012). The penalty for felony crimes includes fines, incarceration and other punitive punishments. A person convicted of felony crime in a court of law is referred to as a felon (Hattery & Smith, 2010). The rights of convicted felons would often be revoked, for example, the right to vote, the right to bear arms and the right to offer service in the military. Felony crimes could be categorized according to the degree which shows the severity of crime. Of all the felony crimes in this categorization, the most serious are first degree crimes. The definitions of these degrees vary depending on the state or federal laws applicable and also depending on the presiding jurisdiction. While some felony offenders would be tried through the system of state criminal justice, others would be tried through the federal court system. These would be governed by state laws and federal laws respectively. This means that despite the similarity in some types of felony crimes, the outcome could be different depending on where they were tried. Similarly, these crimes could be categorized into two; ones that are violent by intent or act and those ones that are not. Non-violent felony crimes are usually considered as white collar crimes. They would mostly be committed in businesses or professional set-ups with the aim of gaining financially at the expense of another person’s loss. ... These convictions make up about 4% of federal convictions as compared to over 16% in state convictions (Hattery & Smith, 2010). Arson refers to an offense that involves maliciously damaging a building, vessel, inhabited structure or any property through fire or explosive (Travis & Visher, 2005). There are other felony offenses that are neither violent in nature nor intent and include burglary, fraud, forgery and larceny. O’Brien (2010) observed that about 67% of convictions for property felony crimes lead to incarceration. Other non-violent crimes include drug trafficking and possession and about 90% of those convicted of crimes related to drugs face incarceration (Hattery & Smith, 2010). The penalties for felony have been classified into tiers depending on each state’s arrangement. They are often categorized in alphabetical and numerical classes like Class 1, Class A and first degree felony, with crimes in a class bearing similar punishment. Other categories could incl ude Class 2, Class B and second degree classes and Class 3, Class C and third class felonies. Murder felony charges and capital punishment would be in their own category. Federal felony classifications have crimes divided from Class A to Class E charges, which determine the fine to be charged depending on the severity of crime and the offender’s prior criminal records. Generally, felonies convicted on State level are less harsh than Federal punishments (Allard, 2002). How well do inmates regain or create family bonds after incarceration? The terms of incarceration for felony cases vary greatly but usually above one year and could even go to one having a life sentence. According to Scirmer, Nellis and Mauer, M. (2009), 1.7 million American children had their

What Shapes External Competitiveness (Compensation Strategy) Essay

What Shapes External Competitiveness (Compensation Strategy) - Essay Example 2. The degree of competitiveness being intense, increases in product prices would correspond to lowering of revenues, if undertaken. Thus most judicious producers would adopt a wait-and -watch attitude rather than take up indiscreet steps of hiking prices to serve short-term monetary interests Finally, coming to organizational structure, it is believed that whether the business is labour or capital intensive, technology driven or market driven- all contribute towards the kind of wage or compensation strategy that would be enforced. As a usual practice, firms that are reputed, technology driven and well entrenched pay higher than start ups and growing business houses. In the sphere of external competitiveness, that is wage bargaining, there are several factors which make their mark. The â€Å"comparing of compensation rates of one organization with that of its competitors† is what determines compensation strategy. The relevant compensation strategy that needs to be pursued. It is believed that â€Å"the organization’s plan for how compensation decisions on the types and amount of pay are made, based on the interests of the employees and keeping with the organization’s mission and competitive position in the market.† (Compensation and internal & external equity, 2008, para.3). Besides this, the level at which compensation is payable to staff, executive or top management level is also important as is the kind of individual contributions made by employees at these levels. Quality and quantity of performance, work commitment, loyalty for the cause of the organization and the ability to work harmoniously in a Compensation and internal & external equity. (2008).One step Compensation Framework. Retrieved June 17, 2010, from

Discuss the differences between 'world cinema' and Hollywood cinema Essay

Discuss the differences between 'world cinema' and Hollywood cinema. Explain why the term 'world cinema' has gained popularity in recent years - Essay Example Economic status of the country is one of the major factors that influence the film text of a country's cinema. An example is the cinema of Vietnam. French trained Vietnamese director Tran Anh Hung, most of his cinematic context was inclined about the ongoing war in Vietnam (Johnson 2003). His movie titled Cyclo (1995) was set in the 90's Vietnam, even it was a gangster movie, hints of war were still traced in the background (Ko, 1999). In 1986, Vietnam's economy plummeted. This greatly affected the filmmaking industry as they cannot respond anymore to the need of cinematic development prevailed during the 80'up to the 90's, started by the Hollywood cinema. The text expressed in Cyclo was very rich and realistically executed as the film portrayed the destituteness of the citizens in the country (Johnson 2003). It was played and recognized in many countries. The movie Ang Pagdadalaga ni Maximo Oliveros (2005) (The Blossoming in Womanhood of Maximo Oliveros) is from the Philippine cinema. The film garnered handful of recognition and awards from various independent film award-giving bodies of different countries. The movie is a dimensional portrayal of the Philippines' condition in allusion. The hero is a homosexual boy that is set to bloom in womanhood, whereas he supposed to get developed in manhood. The discrepancy is suggestive in the very title of the movie about the contrariety of the development of the country regarding poverty and hunger (Thomas 2006). The expected development of the country towards rise of its economy was never portrayed, but the citizens were depicted already adjusted with its economic condition as though being softened, as juxtapose of the main character's nature. Using a homosexual for main character gives a new perspective yet more precise of depicting the country in its economic slum, and the effect of its modernization to the people (Thomas 2006). Cinema of Morocco produced a film titled Jawhara. The movie was noted internationally and has been reviewed online by various critics. Hachim Raji of Babel Med, an independent multi-cultural website for journalists in Mediterranean, stated that Jawhara is movie that was "practically the first film to tackle the dark period of the lead years in Morocco". The film was about a little girl borne and raised inside a prison cell all through out her mother's incarceration term. The cruelty of the country's former administration was strongly depicted in the movie, but delivered presently as reflection of the current administration of its any possible stir (Raji 2007). By the depiction of the situations in the very movie you can easily tell how Morocco as a nation is. Police brutality and suppressed human rights reflects the economic status of the country (Raji 2007). Technological equipment in making film of a nation can also affect the film and define the country's technological development as well. Other country can afford to use more advance technology in making their film, even the very theatrical venue of representation of the film. Hollywood can provide a film that is polished by computer technologies in graphics and animation-required text. Hollywood legendary films like the saga of Star Wars by George Lucas, and Extra Terrestrial of Steven Spielberg