Q1. What additional concerns might a corporate Chief Financial Officer (CFO) face when a company expands into international markets?
Major concern a corporate Chief Financial Officer (CFO) faces when a company expands into international markets are as follows-
1. RISK MANAGEMENT- Risks associated with domestic markets and foreign markets are different so it must be managed efficiently.
2. Political regime changes- The difference in management of different countries will have to be participatory with government of that country. So Inclusive policies should be structured.
3. Management of human resources- Various countries have diverse culture and diverse belief so policies should be made in correlation with it's employees
4. Different Taxation Regimes- Business has to deal with different Taxation regimes as it operates through different countries so Tax management must be efficient in order to gain.
Q1. What additional concerns might a corporate Chief Financial Officer (CFO) face when a company expands...
The Chief Financial Officer (CFO) of a transnational company plans to build a new production site abroad. Choose all possible options for financing this new site. issue bonds A.obtain a loan from another company B.sell common stock C.obtain a loan from a bank D.use some of the company's profits E.pay a dividend to stockholders
A company is considering a new project. The Chief Financial Officer (CFO) plans to calculate the project's NPV. Which of the following factors should the CFO include in the cashflows when estimating the relevant cash flows? a. Effects of the project on other divisions of the firm, but only if those effects lower the project's own direct cash flows. b. All sunk costs that have been incurred relating to the project. c. All interest expenses on debt used to help...
A company chief financial officer (CFO) is estimating his company’s cost of debt. The company’s bonds offer a coupon rate of 8% with semiannual payments, has exactly 3 years remaining until maturity, and each $1,000 par bond is currently priced at $960. The company’s cost of debt is closest to: A) 4.78% B) 5.48% C) 8.00% D) 9.57%
The Chief Financial Officer (CFO), Karl Richland of Semtell Company in Cincinnati, Ohio is asking for your advice. The CFO explains sales are increasing but there is a constant matter of not having enough cash to meet payroll or pay vendors within 30 days. Checklist: Prepare a business letter (see the rubric) to the CFO to explain: 1. Explain why cash can go down even when sales are up; refer to “receivables.” 2. Analyze the scenario and explain three accounts...
The Chief Financial Officer (CFO), Karl Richland of Semtell Company in Cincinnati, Ohio is asking for your advice. The CFO explains sales are increasing but there is a constant matter of not having enough cash to meet payroll or pay vendors within 30 days. Checklist: Prepare a business letter (see the rubric) to the CFO to explain: 1. Explain why cash can go down even when sales are up; refer to “receivables.” 2. Analyze the scenario and explain three accounts...
Suppose the Chief Financial Officer (CFO) of a company is interested in raising funds for a major investment by issuing bonds of varying maturity to investors. One of the longer-term bonds being issued can be purchased for $75,000.00 per bond and pays $7,125.00 annually to the investor. What is the anual interest rate on this bond? John has to decide whether to buy a zero-coupon bond with very little risk that costs $950 and will pay $1080 in one year...
As the Chief Financial Officer (CFO) of ABC Inc., you discover a misstatement that overstated net income (i.e., profit) in the prior year’s financial statements. The misleading financial statements appear in the company’s annual report that was issued to banks and other creditors less than a month ago. After much thought about the consequences of telling the president about this misstatement, you gather your courage to inform her. The president suggests that you simply adjust this year’s financial statements since,...
Assuming today was 1" January 2019. You are the chief financial officer of a US-based company which manufactures and distributes office supplies. As the competition in local market was getting stiffer despite the company's strong customer base, the Board of Directors (the Board) is considering for the company to expand its international business by penetrating to either the Canadian market or Mexican market through exporting. The company anticipates strong demand for office supplies in these two markets. Required: a) What...
A. The chief financial officer (CFO) of Crane Corporation
requested that the accounting department prepare a preliminary
statement of financial position on December 20, 2018. He knows that
certain debt agreements with its lenders require the company to
maintain a current ratio of at least 2:1 and wants to know how the
company is doing. The preliminary statement of financial position
follows:
CRANE
CORPORATION
Statement of Financial Position
December 20, 2018
Assets
Liabilities
Current assets
Current liabilities
Cash
$22,000...
The chief financial officer (CFO) of Sheridan Company requested that the accounting department prepare a preliminary balance sheet on December 30, 2017, so that the CFO could get an idea of how the company stood. He knows that certain debt agreements with its creditors require the company to maintain a current ratio of at least 2:1. The preliminary balance sheet is as follows. Sheridan Company Balance Sheet December 30, 2017 Current assets Cash 27,000 31,300 6,200 Accounts receivable Prepaid insurance...