Reference no: EM133154983
Question - A multinational corporation established a division in Germany as a subsidiary corporation, with an initial investment in total assets of 13 million €'s, which cost the company $19,240,000 Canadian at the time. The company sent an experienced manager to run the division, and gave her a target of 12% required rate of return, promising a bonus if this was met and/or exceeded.
After one year, the subsidiary manager was pleased to report an 18% ROI.
You have been able to determine the following data pertaining to the subsidiary:
Exchange rate at end of year was $1.42 Canadian to the Euro
Operating income was earned evenly throughout the year
The exchange rate changed approximately evenly throughout the year
Required -
1. Calculate the subsidiary's income in €'s.
2. Calculate the subsidiary's return on investment in Canadian dollars.
3. Calculate the subsidiary's residual income in Canadian dollars.
|
Prepare the journal entry to record purchase of building
: Fitzco Inc. purchased a building on January 1st 2002 for $200,000 cash. Prepare the journal entry to record the purchase of the building
|
|
Advanced method produces a positive
: Describe an example where a more advanced method produces a positive or negative result. Why is this?
|
|
Recommend ibm pursue to enter industry
: Imagine that IBM has decided to diversify into the telecommunications business to provide online cloud-computing data services and broad-band access for busines
|
|
Reflect on critical thinking
: Using the readings from this unit's study and other sources that you locate in the library, reflect on critical thinking, systems thinking, and problem solving.
|
|
Calculate the subsidiary residual income in canadian dollars
: A multinational corporation established a division in Germany as a subsidiary corporation, Calculate the subsidiary's residual income in Canadian dollars
|
|
Advantages and limitations of strategy
: Write a memo to Bob Chapek, CEO of the Walt Disney Co., with your analysis of Disney's corporate strategy of "growth by acquisition" of studios like Pixar, Marv
|
|
Difference between commercial and non commercial speech
: Nike Inc. has had its share of criticism for exploitative labor practices in their supply chain. To defend itself against the that they ran "sweatshop" manufact
|
|
What is the book value per share for underwood shares
: Furthermore, the firm's income statement for the year just ended has a net income of $584,000, What is the book value per share for Underwood shares
|
|
Causing significant loss of employment
: Regarding the challenges that Amazon is facing, is the fact that they are causing significant loss of employment on a number of different fronts.
|