CHAPTER6CorporateLevelandInternationalStrategy
英语阅读
Supplementary Reading forChapter 6Lessons for Europe from the Quebec Trade Summit(1)Why I Didn't Go to Miamiby Stephanie GuilloudSpring 2004As one of the lead organizers of the 1999 Seattle direct action protests against the World Trade Organization (WTO), I am invested in the direction of the global justice movement. As a white person, I am invested in how white people align themselves (or don’t align themselves) with people of color and those directly affected by policies and practices of globalization. As an organizer, I am invested in using limited time and resources to our greatest advantage and to the greatest effectiveness. I was moved by my experience in Seattle. I saw massive numbers of people respond to a call for justice. I saw people trusting each other and trusting themselves. I saw spontaneity and creative organizing tactics. I also saw overt and covert oppression dynamics play out among the leadership and participants. I watched the potential of building something from the momentum of a successful event crumble in our hands. Since then, I have been disappointed in the actions of the movement I helped create. I have been disappointed in the lack of reflection and the lack of strategy. I made a decision about attending the protests in Miami from this perspective.Protesting the Free Trade Area of the Americas (FTAA) in Miami in November 2003 was an event. Events gather people together. Events educate, politicize, and enlighten. Events are exciting and emotional. But events are just events if they are not connected to a larger strategy. I see a danger in planning and participating in another event that is not a step of a clear plan to get us closer to a shared vision of a new economy, a new power relation, a new world. The local and regional organizers (like Root Cause) who saw an opportunity to further educate their constituencies about the direct effects of globalization on their communities might have furthered such a plan. From conversations with participants, it sounds like direct action protesters worked harder to connect tolocal issues and include local context in the education and organizing efforts. From these same conversations, I heard that racism within the organizing efforts undermined the process (again). Like in Seattle, people who protested in Miami were inspired, made connections, and were confronted with massive police violence.I want to write to the white folks who feel passionate enough to travel to these events and take a stand. I could critique the predominantly white action-hopping framework of the current US anti-globalization protests. I could remind us in urgent and indignant tones that we live in a highly militarized regime, complete with media blackouts, mass arrests, and millions of dollars worth of federally-bought urban weaponry. I could praise the fact that thousands continue to gather to resist the process of corporate globalization. But I want to ask deeper questions, ones that haven’t been asked yet. I want to write to who I was five years ago, a determined white woman working within her community to mobilize thousands of people to challenge something they’d never heard of. I want to ask questions I could not have answered: How is this moment of resistance connected to a larger strategy? What is the most effective position for white people in a global movement? How do we act in solidarity? How do we use our leverage as North Americans with a distinct kind of power to build a movement for global justice? Can we articulate a vision of a new world so that we know when we’ve achieved it?Strategy to WinIn Seattle, we said we were going to shut down the WTO. We mobilized thousands to do that. We shut down the meeting. That was a success. But it was not a win. Maybe we could have sparked a movement to achieve the win (with goals, strategy, and real coalitions), but we dropped the ball. We turned their elite meetings into an activist touring machine. These meetings and ministerials have been happening for a long time (before and after Seattle). Sometimes in view of the public and sometimes in secret. My question: How does protesting their meetings advance our goals? Do we have well-articulated goals? How do we know when we win?Winning is not getting beat up. Police lines are not a front of struggle. Police lines are a visual (and sometimes physical) representation of a larger system. Resisting the mean and expensive violenceof the cops is not the most effective position we can take. Most people, particularly people of color, are not surprised by police violence or by heavy militarization of our cities. If we are organizing to build power from below, we will face police repression. More accurately, people of color will face the brunt of it. After the five days of protests, Miami police are keeping their toys.EvaluationI believe we need to establish clear goals for our actions so we can be prepared for unintended consequences. When goals are articulated, we can initiate a reflective process. Evaluation and follow-up is essential to developing better strategy. Even with all this time and privilege to pick and choose what issues we focus on, how many direct action activists from Seattle have tracked the direction of the WTO? How many know who the current director is, what their policies are, what effect these protests have truly had? Unfortunately, we rarely do the homework beyond the moment of engagement. We need to examine the information of scholars and the experiences of people who have organized in similar ways. Our work is to translate that information into action on the ground to defeat corporate globalization and create sustainable alternatives to capitalism. If we don’t evaluate our work and our commitment to real change then we are as flimsy and temporary as the paper maiche puppets we build.Building on SuccessOne success from the Seattle protests was popularizing the reality of corporate globalization for more folk (in the U.S.) than anytime before. Building on that success would look like meeting people where they’re at. Facilitating a process that encourages local organizing on globalization issues. Using globalization as a framework to talk to anyone and everyone about the real dangers facing them as teachers (privatization of testing and curriculum); farmers (agri-business destroying small farms); workers (losing jobs to technological advances and cheaper labor in developing countries); youth (increasingly inaccessible higher education avenues); local governments (losing the rights to determine wage levels and school funding).The Georgia Citizen’s Coalition on Hunger, Project South, and 100 organizations have beenorganizing for an Atlanta living wage for over three years. The City Council is poised to pass the ordinance that would require the city and all businesses who receive city contracts or tax breaks to pay workers $10.50 an hour with benefits or $12.50 an hour without benefits. In the last month, business interests and state representatives have circumvented the process and dropped a state bill that would prevent local, city or county, governments from determining wages for private businesses. House Bill 1258 is good old-fashioned globalization right here in Atlanta. Within this current struggle there lie opportunities to draw connections between global economics and local effects. Or to rally folks who are concerned about globalization to take a stand in solidarity with low-income people of color. If we don’t meet people where they’re at and make globalization an accessible issue, the “movement” will remain dominated by white folks who are invested in the rush of a good protest rather than the long-haul of community organizing.VisionI work in a community in Nicaragua through a fifteen year-old sister city organization based in Olympia WA. I visited after the Seattle protests and engaged in a conversation with a good friend my age. Pablo grew up in the Revolution, and his mother is a dedicated community organizer. Now he struggles to keep good paying work and hide his Sandinista identity in a time when Nicaragua is the second poorest country in this hemisphere. He said, “Global finance institutions like the International Monetary Fund and the WTO are killing us. But without them, we would die. What do you propose to replace them?” I felt a profound shift in my understanding, and I appreciate his challenge. Corporate globalization, as a new mechanism of an old institution, is complicated. I want to be part of building a vision that replaces it and answers his question with integrity and real-world solutions.I challenge the people who are invested in making our passion useful to reflect on these questions and engage with this struggle in creative and original ways. History is helpful in that work. Organizing models in the labor, civil rights, and global movements are incredible blueprints. Integrating anti-oppressive practices into our organizing work, whether with people of color or white people, is essential. I don’t believe that any of us in the streets that week in Seattle or Miami want to see the spark completely die out. We have to learn our lessons and move forward. We have tochallenge ourselves and see beyond the line of police to our actual and more relevant opponent.______________________Stephanie edited Voices from the WTO, 1999. She contributed an original essay “Sparks, Fire, and Burning Coals: An Organizer’s History of Seattle” to Battle of Seattle; A Challenge to Capitalist Globalization, 2002. She moved to Atlanta in January 2003 and works as the Grassroots Development Director at Project South.(2)Peasant leader vows to end WTO summitsBy David Rennie and Robert Uhlig in Cancun( 09/09/2003)The leader of the world's largest peasant protest movement vowed yesterday to make this week's meeting of the World Trade Organisation its last.As thousands of anti-capitalist protesters converged on the Caribbean beach resort, now converted into a virtual fortress, Rafael Alegria said the meeting of global trade ministers would be shut down or cut short by marches, human blockades and other forms of "direct action", as happened in Seattle in 1999."We pursue these international organisations wherever they meet," Mr Alegria - the head of the Via Campesina movement, which claims 60 million members - told The Telegraph at a protest encampment near Cancun's commercial district."Before, Seattle was known for manufacturing Boeing aeroplanes. Now it is known as the site of that huge global day of action. Cancun's image is now set to be transformed, from a tourist city, into a place of global struggle," said Mr Alegria.Behind multiple road blocks and barbed-wire topped fences 20,000 police and troops, backed by helicopters, warships and fast inshore patrol boats, were waiting to prove him wrong.Mexican authorities have chosen the meeting site carefully. Delegates will be sealed in luxuryhotels lining a narrow 17-mile ribbon of land beside the Caribbean accessible by only two roads. A large, swampy lagoon separates the city from the hotel strip and is patrolled by high-speed navy inflatables."Authorities will not act in a repressive manner, but their objective is to protect the security of the meeting … I am going to say clearly, they are going to defend it if necessary," said Gen Francisco Arellano, commander of federal security forces assembled for the meeting.About 5,000 ordinary police have been joined by foreign officers, and plain clothes military intelligence agents. Ministers and delegates from the 146 member countries of the World Trade Organisation meet tomorrow to try to rescue floundering talks on agriculture and trade.The main sticking point of the meeting will be agriculture, as ministers seek some way of reforming global farming that protects Third World peasants without losing the support of the world's richest farmers in Europe and America.Any hope of a breakthrough is becoming less likely as secondary issues are added, including proposals to protect the geographical names of foods and drinks that would outlaw the sale of America's leading beer because Budweiser should come only from the Czech town of Budejovice.Though central Cancun is filling with dreadlocked American students, South Korean trade unionists sporting anti-WTO headbands, and lorry-loads of landless peasants, none would admit to planning violent protests, yet all predicted that some would occur.A first demonstration, on Sunday, protested at the arrival of 30 dolphins at a Cancun water park, where tourists and WTO delegates may pay to swim with them. Mr Alegria said his movement was peaceful, but "respected" those planning to fight."Those directly responsible for any violence will be governments, the WTO, World Bank and IMF, because they have created a barbaric economic system that has killed millions worldwide," he said.British protesters have largely stayed away, dissuaded by the high cost of travel and the lure of a large arms fair in London, said Dave Timms of the British-based World Development Movement.Cancun is an artificial city. Its hotel strip resembles a long shopping centre, with its fibreglass renderings of Mayan temples, pyramid shaped hotels, and - in a final post-modern touch - fake Mexican theme restaurants, in Mexico."The WTO has done us a favour, providing a fantastic visual example of what is wrong with corporate globalisation. Cancun is environmentally destructive and is based on extreme inequality between the workers and rich North American visitors," Mr Timms said.。
International Financial Management 6 edition Chapter 6--Solution
c. Following the arbitrage transactions described above, The dollar interest rate will rise; The pound interest rate will fall; The spot exchange rate will rise; The forward exchange rate will fall. These adjustments will continue until IRP holds. 4. Suppose that the current spot exchange rate is €0.80/$ and the three-month forward exchange rate is €0.7813/$. The three-month interest rate is 5.6 percent per annum in the United States and 5.40 percent per annum in France. Assume that you can borrow up to $1,000,000 or €800,000. a. Show how to realize a certain profit via covered interest arbitrage, assuming that you want to realize profit in terms of U.S. dollars. Also determine the size of your arbitrage profit. b. Assume that you want to realize profit in terms of euros. Show the covered arbitrage process and determine the arbitrage profit in euros. Solution: a. (1+ i$) = 1.014 < (S/F) (1+ i € ) = 1.0378. Thus, one has to borrow dollars and invest in euros to make arbitrage profit. 1. Borrow $1,000,000 and repay $1,014,000 in three months. 2. Sell $1,000,000 spot for €800,000. 3. Invest €800,000 at the euro interest rate of 1.35 % for three months and receive €810,800 at maturity. 4. Sell €810,800 forward for $1,037,758. Arbitrage profit = $1,037,758 - $1,014,000 = $23,758. b. Follow the first three steps above. But the last step, involving exchange risk hedging, will be different. 5. Buy $1,014,000 forward for €1,034,280. Arbitrage profit = €1,074,310 - €1,034,280 = €40,030
流利说商务英语 Level 6 Unit 2 Part 1(四) Manifestations of CSR
流利说商务英语Level 6 Unit 2 Part 1(四) Manifestations of CSR sponsorshipSponsorship is money given by a company to support a person or an organization.A company can sponsor events to show its commitment to improving society.For example, GasTerra, a green gas company, sponsors Walk for Life, an event which raises money for cancer research in young adults.disease preventionCSR efforts also include disease prevention.Companies may focus on food safety, dental health, vaccines, and immunization.For example, to improve food safety, a food company may use cleaner ingredients and production methods.Areas such as food safety, dental health, vaccines, and immunization are examples of disease prevention.McDonald's believes that by sponsoring the Olympics, it can create both social and commercial value.Takeda's global CSR programs focus on disease prevention in developing and emerging countries.environmental initiativesEnvironmental initiatives are activities that promote environmental awareness and sustainability.Sustainability efforts can help companies reduce pollution and energy consumption. And other philanthropic activities can also improve the company's public perception.ethical labor practicesEthical labor practices refer to the fair treatment of employees.They also focus on improving labor practices of other companies around the world. For example, IKEA has done this by fighting against child labor in the supply chain.What kind of CSR may focus on how much energy a company uses? environmental initiatives.What are vaccines and immunization examples of? disease prevention.Google powers its offices through wind energy, which is cleaner and cheaper than other energy sources.Thai Union strives to implement ethical labor practices in the seafood industry by bringing an end to human trafficking.。
International-Business-Environments-and-Operations教案资料
What the major trade theories Do and Don’t discuss
6-6
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Interventionist Theories
• Mercantilist theory proposed that a country should try to achieve a favorable balance of trade (export more than it imports)
• Assumptions policymakers question:
▪ full employment ▪ economic efficiency ▪ division of gains ▪ two countries, two commodities ▪ transport costs ▪ statics and dynamics ▪ services ▪ production networks ▪ mobility
6-8
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Theories of Specialization
• Both absolute and comparative advantage theories are based on specialization
Free Trade Theories
• Absolute Advantage
▪ Suggests specialization through free trade because consumers will be better off buying foreign-made products priced more cheaply than domestic ones
CHAPTER6CorporateLevelandInternationalStrategy
Chapter 6
Corporate Level and International Strategy
Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2005
Corporate Level and International Strategy - Outline
Exhibit 6.3
Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2005
Related Diversification
Strategy development beyond current products and markets, but within the capabilities or value network of the organisation
Reasons for Diversification (2)
• Less obvious value creation
– In response to environmental change
• To defend existing value • Or straying too far from dominant logic?
Product/Market Diversity
Diversification is a strategy which takes the organisation into new markets and products or services
• What is the extent and nature of products/services offered by the corporate parent?
财务管理课件
财务管理基本领域 Basic Areas Of Finance
• • • •
公司理财Corporate finance 投资Investments 金融机构Financial institutions 国际财务管理International finance投资 InvFra bibliotekstments
• •
•
与金融资产打交道，如股票和债券Work with financial assets such as stocks and bonds 金融资产价值，风险与收益及资产配置 Value of financial assets, risk versus return and asset allocation 工作机会Job opportunities
财务经理目标 Goal Of Financial Management
公司目标应该是什么？What
should be the
goal of a corporation?
利润最大化？Maximize profit? 成本最小化？Minimize costs? 市场份额最大？Maximize market share? 公司当前股票价值最大化？Maximize the current value of the company’s stock?
财务长—现金管理/信用管理/资本支出和财务预测 Treasurer – oversees cash management, credit management, capital expenditures and financial planning 会计长—税/成本会计/财务会计/数据处理
财务管理决策 Financial Management Decisions
商业伦理-英文版 Chapter 6 Employee Management Ethics
Which party are you in favor of, the employer or the employee?
Employee Management Ethics
1. Employer and Employee Rights and Responsibilities
Employers and employees have rights and responsibilities and each should honor with respect to the other. What is the glue that holds together the organization’s many layers of employees and managers and that fixes these people onto the organization’s goals and formal hierarchy? Contracts . Contractual agreements — some explicit and some left implicit — cement each employee into the organization by defining each employee’s duties and scope of authority within the organization.
新视界商务英语系列教材
Chapter 6 Employee Management Ethics
Learning Objectives
1. Analyze the relationship between employer and employee. 2. Understand employee rights. 3. Describe the employee’s obligations to the employer. 4. Explain the conflict of interest betห้องสมุดไป่ตู้een employer and employee. 5. Detail the employer’s responsibilities to the employee. 6. Identify various forms of job discrimination. 7. Evaluate the importance of whistleblowing. 8. Assess the workplace surveillance.
罗斯公司理财第六版习题答案第6章
Chapter 6: Some Alternative Investment RulesConcept Questions - Chapter 66.2 ∙List the problems of the payback period rule.1.It does not take into account the time value of money.2.It ignores payments after the payback period.3.The cutoff period is arbitrary.∙What are some advantages?1.It is simple to implement.2.It may help in controlling and evaluating managers.6.4 ∙What are the three steps in calculating AAR?1.Determine average net income.2.Determine average investment3.Divide average net income by average investment.∙What are some flaws with the AAR approach?1.It uses accounting figures.2.It takes no account of timing.3.The cutoff period is arbitrary.6.5 ∙How does one calculate the IRR of a project?Using either trial-and-error or a financial calculator, one finds the discount ratethat produces an NPV of zero.6.6 ∙What is the difference between independent projects and mutually exclusiveprojects?An independent project is one whose acceptance does not affect the acceptance of another. A mutually exclusive project, on the other hand is one whose acceptance precludes the acceptance of another.∙What are two problems with the IRR approach that apply to both independent and mutually exclusive projects?1.The decision rule depends on whether one is investing of financing.2.Multiple rates of return are possible.∙What are two additional problems applying only to mutually exclusive projects?1.The IRR approach ignores issues of scale.2.The IRR approach does not accommodate the timing of the cash flowsproperly.6.7 ∙How does one calculate a project's profitability index?Divide the present value of the cash flows subsequent to the initial investment by the initial investment.∙How is the profitability index applied to independent projects, mutually exclusive projects, and situations of capital rationing?1.With independent projects, accept the project if the PI is greater than 1.0 andreject if less than 1.0.2.With mutually exclusive projects, use incremental analysis, subtracting thecash flows of project 2 from project 1. Find the PI. If the PI is greater than1.0, accept project 1. If less than 1.0, accept project2.3.In capital rationing, the firm should simply rank the projects according to theirrespective PIs and accept the projects with the highest PIs, subject to thebudget constrain.Answers to End-of-Chapter ProblemsQUESTIONS AND PROBLEMSThe Payback Period Rule6.1 Fuji Software, Inc., has the following projects.Year Project A Project B0 _$7,500 _$5,0001 4,000 2,5002 3,500 1,2003 1,500 3,000a. Suppose Fuji’s cutoff payback period is two years. Which of these two projects should be chosen?b. Suppose Fuji uses the NPV rule to rank these two projects. If the appropriate discount rate is 15 percent, which project should be chosen?6.1 a. Payback period of Project A = 1 + ($7,500 - $4,000) / $3,500 = 2 yearsPayback period of Project B = 2 + ($5,000 - $2,500 -$1,200) / $3,000 = 2.43 yearsProject A should be chosen.b. NPV A = -$7,500 + $4,000 / 1.15 + $3,500 / 1.152 + $1,500 / 1.153 = -$388.96NPV B = -$5,000 + $2,500 / 1.15 + $1,200 / 1.152 + $3,000 / 1.153 = $53.83Project B should be chosen.6.2 Suppose Peach Paving Company invests $1 million today on a new construction project. The project will generate annual cash flows of $150,000 in perpetuity. The appropriate annual discount rate for the project is 10 percent.a. What is the payback period for the project? If the Peach Paving Company desires to have a 10-year payback period, should the project be adopted?b. What is the discounted payback period for the project?c. What is the NPV of the project?6.2 a. Payback period = 6 + {$1,000,000 - ($150,000 ⨯ 6)} / $150,000 = 6.67 yearsYes, the project should be adopted.A= $974,259b. $150,000 11.010The discounted payback period = 11 + ($1,000,000 - $974,259) / ($150,000 / 1.112)= 11.54 yearsc. NPV = -$1,000,000 + $150,000 / 0.10 = $500,000The Average Accounting Return6.3 The annual, end-of-year, book-investment accounts for the machine whose purchase your firm is considering are shown below.Purchase Year Year Year YearDate 1 2 3 4Gross investment $16,000 $16,000 $16,000 $16,000 $16,000Less: accumulateddepreciation ______0_ ___4_,0_0_0_ ___8_,0_0_0_ __1_2_,0_0_0_ _1_6_,_0_0_0Net investment $16,000 $12,000 $ 8,000 $ 4,000 $ 0If your firm purchases this machine, you can expect it to generate, on average, $4,500 peryear in additional net income.a. What is the average accounting return for this machine?b. What three flaws are inherent in this decision rule?6.3 a. Average Investment:($16,000 + $12,000 + $8,000 + $4,000 + 0) / 5 = $8,000Average accounting return:$4,500 / $8,000 = 0.5625 = 56.25%b. 1. AAR does not consider the timing of the cash flows, hence it does notconsider the time value of money.2. AAR uses an arbitrary firm standard as the decision rule.3. AAR uses accounting data rather than net cash flows.6.4 Western Printing Co. has an opportunity to purchase a $2 million new printing machine. It has an economic life of five years and will be worthless after that time. This new investment is expected to generate an annual net income of $100,000 one year from today and the income stream will grow at 7 percent per year subsequently. The company adopts a straight-line depreciation method (i.e., equal amounts of depreciation in each year). What is the average accounting return of the investment? Supposing Western Printing’s AAR cutoff is 20 percent, should the machine be purchased?6.4 Average Investment = ($2,000,000 + 0) / 2 = $1,000,000Average net income = [$100,000 {(1 + g)5 - 1} / g] / 5= {$100,000A (1.075 - 1} / 0.07} / 5= $115,014.78AAR = $115,014.78 / $1,000,000 = 11.50%No, since the machine’s AAR is less than the firm’s cutoff AAR.6.5 Nokia Group has invested $8,000 in a high-tech project. This cost is depreciated on an accelerated basis that yields $4,000, $2,500, $1,500 of depreciation, respectively, during its three-year economic life. The project is expected to produce income before tax of $2,000 each year during its economic life. If the tax rate is 25%, what is the project’s average accounting return (AAR)?a. 44.44%b. 50.23%c. 66.67%d. 70.00%e. 82.21%The Internal Rate of Return6.5 a6.6 Compute the internal rate of return on projects with the following cash flows.Cash Flows ($)Year Project A Project B0 _3,000 _6,0001 2,500 5,0002 1,000 2,000/ $160,000 = 1.046.6PI = $40,000 715.0Since the PI exceeds one accept the project.6.7 CPC, Inc., has a project with the following cash flows.Year Cash Flows ($)0 _8,0001 4,0002 3,0003 2,000a. Compute the internal rate of return on the project.b. Suppose the appropriate discount rate is 8 percent. Should the project be adopted by CPC?6.7 The IRR is the discount rate at which the NPV = 0.-$3,000 + $2,500 / (1 + IRR A) + $1,000 / (1 + IRR A)2 = 0By trial and error, IRR A = 12.87%Since project B’s cash flows are two times of those of project A, the IRR B = IRR A =12.87%6.8 Compute the internal rate of return for the cash flows of the following two projects.Cash Flows ($)Time A B0 _2,000 _1,5001 2,000 5002 8,000 1,0003 _8,000 1,5006.8 a. Solve x by trial and error:-$4,000 + $2,000 / (1 + x) + $1,500 / (1 + x)2 + $1,000 / (1 + x)3 = 0x = 6.93%b. No, since the IRR (6.93%) is less than the discount rate of 8%.6.9 Suppose you are offered $5,000 today and obligated to make scheduled payments as follows:Year Cash Flows ($)0 5,0001 _2,5002 _2,0003 _1,0004 _1,000a. What is the IRRs of this offer?b. If the appropriate discount rate is 10 percent, should you accept this offer?c. If the appropriate discount rate is 20 percent, should you accept this offer?Chapter 6 Some Alternative Investment Rules 165d. What is the corresponding NPV of the project if the appropriate discount rates are 10 percent and 20 percent, respectively? Are the choices under the NPV rule consistent with those of the IRR rule?6.9 Find the IRRs of project A analytically. Since the IRR is the discount rate that makes the NPVequal to zero, the following equation must hold.-$200 + $200 / (1 + r) + $800 / (1 + r)2 - $800 / (1 + r)3 = 0$200 [-1 + 1 / (1 + r)] - {$800 / (1 + r)2}[-1 + 1 / (1 + r)] = 0[-1 + 1 / (1 + r)] [$200 - $800 / (1 + r)2] = 0For this equation to hold, either [-1 + 1 / (1 + r)] = 0 or [$200 - $800 / (1 + r)2] = 0.Solve each of these factors for the r that would cause the factor to equal zero. Theresulting rates are the two IRRs for project A. They are either r = 0% or r = 100%.Note: By inspection you should have known that one of the IRRs of project A iszero. Notice that the sum of the un-discounted cash flows for project A is zero.Thus, not discounting the cash flows would yield a zero NPV. The discount ratewhich is tantamount to not discounting is zero.Here are some of the interactions used to find the IRR by trial and error.Sophisticated calculators can compute this rate without all of the tedium involved inthe trial-and-error method.NPV = -$150 + $50 / 1.3 + $100 / 1.32 + $150 / 1.33 = $15.91NPV = -$150 + $50 / 1.4 + $100 / 1.42 + $150 / 1.43 = -$8.60NPV = -$150 + $50 / 1.37 + $100 / 1.372 + $150 / 1.373 = -$1.89NPV = -$150 + $50 / 1.36 + $100 / 1.36 2 + $150 / 1.363 = $0.46NPV = -$150 + $50 / 1.36194 + $100 / 1.361942 + $150 / 1.361943= $0.0010NPV = -$150 + $50 / 1.36195 + $100 / 1.361952 + $150 / 1.361953= -$0.0013NPV = -$150 + $50 / 1.361944 + $100 / 1.3619442 + $150 / 1.3619443= $0.0000906Thus, the IRR is approximately 36.1944%.6.10 As the Chief Financial Officer of the Orient Express, you are offered the following twomutually exclusive projects.Year Project A Project B0 _$5,000 _$100,0001 3,500 65,0002 3,500 65,000a. What are the IRRs of these two projects?b. If you are told only the IRRs of the projects, which would you choose?c. What did you ignore when you made your choice in part (b)?d. How can the problem be remedied?e. Compute the incremental IRR for the projects.f. Based on your answer to part (e), which project should you choose?g. Suppose you have determined that the appropriate discount rate for these projectsis 15 percent. According to the NPV rule, which of these two projects should beadopted?6.10 a. Solve r in the equation:$5,000 - $2,500 / (1 + r) - $2,000 / (1 + r)2 - $1,000 / (1 + r)3- $1,000 / (1 + r)4 = 0By trial and error,IRR = r = 13.99%b. Since this problem is the case of financing, accept the project if the IRR is less thanthe required rate of return.IRR = 13.99% > 10%Reject the offer.c. IRR = 13.99% < 20%Accept the offer.d. When r = 10%:NPV = $5,000 - $2,500 / 1.1 - $2,000 / 1.12 - $1,000 / 1.13 - $1,000 / 1.14= -$359.95When r = 20%:NPV = $5,000 - $2,500 / 1.2 - $2,000 / 1.22 - $1,000 / 1.23 - $1,000 / 1.24= $466.82Yes, they are consistent with the choices of the IRR rule since the signs of the cashflows change only once.6.11 Consider two streams of cash flows, A and B. Cash flow A consists of $5,000 starting three years from today and growing at 4 percent in perpetuity. Cash flow B consists of _$6,000 starting two years from today and continuing in perpetuity. Assume the appropriate discount rate is 12 percent.a. What is the present value of each stream?b. What is the IRR of a project C, which is a combination of projects A and B; that is, C _ A _ B?c. If it is assumed that the discount rate is always positive, what is the rule related to IRR for assessing project C that would correspond to the NPV rule?6.11 a. Project A:NPV = -$5,000 + $3,500 / (1 + r) + $3,500 / (1 + r)2 = 0IRR = r = 25.69%Project B:NPV = -$100,000 + $65,000 / (1 + r) + $65,000 / (1 + r)2 = 0IRR = r = 19.43%b. Choose project A because it has a higher IRR.c. The difference in scale is ignored.d. Apply the incremental IRR method.e.C0C1C2B - A -$95,000 $61,500 $61,500NPV = -$95,000 + $61,500 / (1 + r) + $61,500 / (1 + r)2 = 0Incremental IRR = r = 19.09%f. If the discount rate is less than 19.09%, choose project B.Otherwise, choose project A.g. NPV A = -$5,000 + $3,500 / 1.15 + $3,500 / 1.152 = $689.98NPV B = -$100,000 + $65,000 / 1.15 + $65,000 / 1.152 = $5,671.08Choose project B.6.12 Project A involves an investment of $1 million, and project B involves an investment of $2 million. Both projects have a unique internal rate of return of 20 percent. Is the following statement true or false? Explain your answer.For any discount rate between 0 percent and 20 percent, inclusive, project B has an NPV twice as great as that of project A.6.12 a. PV A = {$5,000 / (0.12 - 0.04)} / 1.122 = $49,824.61 PV B = (-$6,000 / 0.12) / 1.12 = -$44,642.86 b. The IRR for project C must solve{$5,000 / (x - 0.04)} / (1 + x)2 + (-$6,000 / x) / (1 + x) = 0 $5,000 / (x - 0.04) - $6,000 (1 + x) / x = 0 25 x 2 + 3.17 x - 1 =0x = {-3.17 - (110.0489)0.5} / 50 or {-3.17 + (110.0489)0.5} / 50 The relevant positive root is IRR = x = 0.1464 = 14.64%c.To arrive at the appropriate decision rule, we must graph the NPV as a function of the discount rate. At a discount rate of 14.64% the NPV is zero. To determine if the graph is upward or downward sloping, check the NPV at another discount rate. At a discount rate of 10% the NPV is $14,325.07 [= $68,870.52 - $54,545.54]. Thus, the graph of the NPV is downward sloping. From the discussion in the text, if an NPV graph is downward sloping, the project is an investing project. The correct decision rule for an investing project is to accept the project if the discount rate is below 14.64%.The Profitability Index6.13 Suppose the following two mutually exclusive investment opportunities are available to the DeAngelo Firm. The appropriate discount rate is 10 percent. Year Project Alpha Project Beta 0 _$500 _$2,000 1 _300 _300 2 700 1,800 3 600 1,700a. What is the NPV of project alpha and project beta?b. Which project would you recommend for the DeAngelo Firm?6.13 Generally, the statement is false. If the cash flows of project B occur early and the cashflows of project A occur late, then for a low discount rate the NPV of A can exceed the NPV of B. Examples are easy to construct.14.64%10%rNPV$14,325.07C0C1C2IRR NPV @ 0% A: -$1,000,000 $0 $1,440,000 0.20 $440,000B: -2,000,000 2,400,000 0 0.20 400,000 In one particular case, the statement is true for equally risky projects. If the lives of thetwo projects are equal and in every time period the cash flows of the project B are twicethe cash flows of project A, then the NPV of project B will be twice as great as the NPV of project A for any discount rate between 0% and 20%.6.14 The firm for which you work must choose between the following two mutually exclusive projects. The appropriate discount rate for the projects is 10 percent.ProfitabilityC0 C1 C2 Index NPVA _$1,000 $1,000 $500 1.32 $322B _500 500 400 1.57 285The firm chose to undertake A. At a luncheon for shareholders, the manager of a pension fund that owns a substantial amount of the firm’s stock asks you why the firm chose project A instead of project B when B is more profitable.How would you justify your firm’s action? Are there any circumstances under which the pension fund manager’s argument could be correct?6.14 a. NPVα = $756.57 - $500 = $256.57NPVβ = $2,492.11 - $2,000 = $492.11b. Choose project beta.6.15 The treasurer of Davids, Inc., has projected the cash flows of projects A, B, and C as follows. Suppose the relevant discount rate is 12 percent a year.Year Project A Project B Project C0 _$100,000 _$200,000 _$100,0001 70,000 130,000 75,0002 70,000 130,000 60,000a. Compute the profitability indices for each of the three projects.b. Compute the NPVs for each of the three projects.c. Suppose these three projects are independent. Which projects should Davids accept based on the profitability index rule?d. Suppose these three projects are mutually exclusive. Which project should Davids accept based on the profitability index rule?e. Suppose Davids’ budget for these projects is $300,000. The projects are not divisible. Which projects should Davids accept?6.15 Although the profitability index is higher for project B than for project A, the NPV is theincrease in the value of the company that will occur if a particular project is undertaken.Thus, the project with the higher NPV should be chosen because it increases the value of the firm the most. Only in the case of capital rationing could the pension fund manager be correct.6.16 Bill plans to open a self-serve grooming center in a storefront. The grooming equipment will cost $160,000. Bill expects the after-tax cash inflows to be $40,000 annually for seven years, after which he plans to scrap the equipment and retire to the beaches of Jamaica.Assume the required return is 15%. What is the project’s PI? Should it be accepted?Comparison of Investment Rules6.16 a. PI A = ($70,000 / 1.12 + $70,000 / 1.122) / $100,000 = 1.183PI B = ($130,000 / 1.12 + $130,000 / 1.122) / $200,000 = 1.099PI C = ($75,000 / 1.12 + $60,000 / 1.122) / $100,000 = 1.148b. NPV A = -$100,000 + $118,303.57 = $18,303.57NPV B = -$200,000 + $219,706.63 = $19,706.63NPV C = -$100,000 + $114,795.92 = $14,795.92c. Accept all three projects because PIs of all the three projects are greater than one.d. Based on the PI rule, project C can be eliminated because its PI is less than the oneof project A, while both have the same amount of the investment. We can computethe PI of the incremental cash flows between the two projects,Project C0C1C2PIB - A -$100,000 $60,000 $60,000 1.014We should take project B since the PI of the incremental cash flows is greater thanone.e. Project B has the highest NPV, while A has the next highest NPV.Take both projects A and B.6.17 Define each of the following investment rules. In your definition state the criteria for accepting or rejecting an investment under each rule.a. Payback periodb. Average accounting returnc. Internal rate of returnd. Profitability indexe. Net present value6.17 a. The payback period is the time it takes to recoup the initial investment of a project.Accept any project that has a payback period that is equal to or shorter than thecompany’s standard payback period. Reject all other projects.b. The average accounting return (AAR) is defined asAverage project earnings ÷ Average book value of the investment.Accept pr ojects for which the AAR is equal to or greater than the firm’s standard.Reject all other projects.c. The internal rate of return (IRR) is the discount rate which makes the net presentvalue (NPV) of the project zero. The accept / reject criteria is:If C0 < 0 and all future cash flows are positive, accept the project if IRR ≥discount rate.If C0 < 0 and all future cash flows are positive, reject the project if IRR <discount rate.If C0 > 0 and all future cash flows are negative, accept the project if IRR ≤discount rate.If C0 > 0 and all future cash flows are negative, reject the project if IRR >discount rate.If the project has cash flows that alternate in sign, there is likely to be more thanone positive IRR. In that situation, there is no valid IRR accept / reject rule.d. The profitability index (PI) is defined as:(The present value of the cash flows subsequent to the initial investment ÷The initial investment)Accept any project for which the profitability index is equal to or greater thanone. Reject project for which that is not true.e. The net present value (NPV) is the sum of the present values of all project cashflows. Accept those projects with NPVs which are equal to or greater than zero.Rejects p roposals with negative NPVs.6.18 Consider the following cash flows of two mutually exclusive projects for Chinese Daily News.New Sunday New SaturdayYear Early Edition Late Edition0 _$1,200 _$2,1001 600 1,0002 550 9003 450 800a. Based on the payback period rule, which project should be chosen?b. Suppose there is no corporate tax and the cash flows above are income before the depreciation. The firm uses a straight-line depreciation method (i.e., equal amounts of depreciation in each year). What is the average accounting return for each of these two projects?c. Which project has a greater IRR?d. Based on the incremental IRR rule, which project should be chosen?6.18 Let project A represent New Sunday Early Edition; and let project B represent NewSaturday Late Edition.a. Payback period of project A = 2 + ($1,200 - $1,150) / $450 = 2.11 yearsPayback period of project B = 2 + ($2,100 - $1,900) / $800 = 2.25 yearsBased on the payback period rule, you should choose project A.b. Project A:Average investment = ($1,200 + $0) / 2 = $600Depreciation = $400 / yearAverage income = [($600 - $400) + ($550 - $400) + ($450 - $400)] / 3= $133.33AAR = $133.33 / $600 = 22.22%Project B:Average investment = ($2,100 + $0) / 2 = $1,050Depreciation = $700 / yearAverage income = [($1,000 - $700) + ($900 - $700) + ($800 - $700)] / 3= $200AAR = $200 / $1,050 = 19.05%c. IRR of project A:-$1,200 + $600 / (1 + r) + $550 / (1 + r)2 + $450 / (1 + r)3 = 0IRR = r = 16.76%IRR of project B:-$2,100 + $1,000 / (1 + r) + $900 / (1 + r)2 + $800 / (1 + r)3 = 0IRR = r = 14.29%Project A has a greater IRR.d. IRR of project B-A:Incremental cash flowsYear 0 1 2 3B - A -$900 $400 $350 $350-$900 + $400 / (1 + r) + $350 / (1 + r)2 + $350 / (1 + r)3 = 0Incremental IRR = r = 11.02%If the required rate of return is greater than 11.02%, then choose project A.If the required rate of return is less than 11.02%, then choose project B.6.19 Consider the following cash flows on two mutually exclusive projects that require an annual return of 15 percent. Working in the financial planning department for the Bahamas Recreation Corp., you are trying to compare different investment criteria to arrive at a sensible choice of these two projects.Deepwater New SubmarineYear Fishing Ride0 _$600,000 _$1,800,0001 270,000 1,000,0002 350,000 700,0003 300,000 900,000a. Based on the discounted payback period rule, which project should be chosen?b. If your decision rule is to accept the project with a greater IRR, which project should you choose?c. Since you are fully aware of the IRR rule’s scale problem, you calculate the incremental IRR for the cash flows. Based on your computation, which project should you choose?d. To be prudent, you compute the NPV for both projects. Which project should you choose? Is it consistent with the incremental IRR rule?6.19 Let project A be Deepwater Fishing; let project B be New Submarine Ride.a. Project A:Year Discounted CF Cumulative CF0 -$600,000 -$600,0001 234,783 -365,2172 264,650 -100,5673 197,255Discounted payback period of project A = 2 + $100,567 / $197,255= 2.51 yearsProject B:Year Discounted CF Cumulative CF0 -$1,800,000 -$1,800,0001 869,565 -930,4352 529,301 -401,1343 591,765Discounted payback period of project B = 2 + $401,134 / $591,765= 2.68 yearsProject A should be chosen.b. IRR of project A:-$600,000 + $270,000 / (1 + r) + $350,000 / (1 + r)2 + $300,000 / (1 + r)3 = 0IRR = r = 24.30%IRR of project B:-$1,800,000 + $1,000,000 /(1 + r) + $700,000 / (1 + r)2 + $900,000 / (1 + r)3= 0IRR = r = 21.46%Based on the IRR rule, project A should be chosen since it has a greater IRR.c. Incremental IRR:Year 0 1 2 3B - A -$1,200,000 $730,000 $350,000 $600,000-$1,200,000 + $730,000 / (1 + r) + $350,000 / (1 + r)2 + $600,000 / (1 + r)3 = 0Incremental IRR = r = 19.92%Since the incremental IRR is greater than the required rate of return, 15%, chooseproject B.d. NPV A = -$600,000 + $270,000 / 1.15 + $350,000 / 1.152 + $300,000 / 1.153= $96,687.76NPV B = -$1,800,000 + $1,000,000 / 1.15 + $700,000 / 1.152 + $900,000 / 1.153 = $190,630.39Since NPV B > NPV A, choose project B.Yes, the NPV rule is consistent with the incremental IRR rule.6.20 The Utah Mining Corporation is set to open a gold mine near Provo, Utah. According to the treasurer, Steven Sample, “This is a golden opportunity.” The mine will cost $600,000 to open. It will generate a cash inflow of $100,000 during the first year and the cash flows are projected to grow at 8 percent per year for 10 years. After 10 years the mine will be abandoned. Abandonment costs will be $50,000.a. What is the IRR for the gold mine?b. The Utah Mining Corporation requires a 10 percent return on such undertakings.Should the mine be opened?6.20 a. The IRR is the discount rate at which the NPV = 0Answers to End-of-Chapter Problems B-75-$600,000 + ()0r 1000,50$r 1%811%)8r (000,100$1111=+-⎥⎥⎦⎤⎢⎢⎣⎡⎪⎭⎫ ⎝⎛++--IRR ≈18.56% b. Yes, the mine should be opened since its IRR exceeds its required return of 10%.。
chap06 Sales Knowledge：Customers, Products, Technologies
Employer Word processing E-mail Fax capabilities and support Customer Order Processing and Service Support Salespeople's mobile offices
Technology Etiquette
Netiquette – etiquette on the internet
Cell Phones Voice Mail Faxes Speakerphones and Conference Calls
Summary of Major Selling Issues
Increase overall sales and sales of a specific product Give salespeople additional selling information for sales
presentations Develop leads for salespeople through mail-ins and ad response Increase cooperation from channel members through co-op advertising and promotional campaigns Educate the customer about the company’s product
Chapter
6
Main Topics
Knowledge of Technology Enhances
Sales and Customer Service Sales: Internet and the World Wide Web Global Technology Provides Service Technology Etiquette
Chapter06-The_Political_Economy_of_International_Trade
International Business Chapter Six: The Political Economy of International Trade
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Classroom Performance System
A tariff levied as a fixed charge for each unit of a good imported is a(n)
Tariffs Subsidies Import Quotas &Voluntary Export Restraints Local Content Requirement Administrative Policies Antidumping Policies
☆ The Case for Government Intervention ☆ Development of the World Trading System
第六章：国际贸易中的政治经济
International Business
Chapter Six: The Political Economy of International Trade
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Outline of Chapter 6: ☆ United States Cotton Subsidies and World Trade ☆ Instruments of Trade Policy
Fixed tariff b) Specific tariff c) Ad valorem tariff d) Transit tariff
a)
International Business
b
Chapter Six: The Political Economy of International Trade
chapter06[1]
![chapter06[1]](https://img.taocdn.com/s3/m/bca469f34693daef5ef73d0b.png)
Francis & Ibbotson
Chapter 6: The Global Stock Market
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Brokerage Services
Brokers
– Sales people (earning a commission) employed by dealers – Have no money invested in the dealer’s security inventory – Help create markets by buying and selling from employer’s inventory
The Global Stock Market
Chapter 6
Slides by: Pamela L. Hall, Western Washington University
Francis & Ibbotson Chapter 6: The Global Stock Market
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Background
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Types of Trading Orders
Scale order
– Requires buying or selling part of the order at each price as market prices change
Fill or kill (FOK) order
Cumbersome and not all brokers accept them
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Brokerage Services
Types of stock brokerage services
– Full-service
Examples Take buy and sell orders –Merrill Lynch Extend margin credit to customers –Goldman Sachs Hold clients’ securities in safe keeping –PaineWebber Collect cash dividends –Morgan Stanley Dean Witter Provide free investment research –Salomon Smith Barney Perform ‘hand-holding’ services
国际商务英语课文电子版lesson (6)
Where there are no differences among countries in the basic capabilities at producing goods, other bases for trade among them may still exist. First, patterns of demand may differ among nations. For example, most consumers in one country may consider dog meat a delicacy(delicious food), while in another country the consumption of dog meat is abhorrent. In this case the second country may sell its dog meat to the first country. Trade will be based not on differences in theproduction capabilities of the two countries but on different consumption preferences.Second, trade may occur out of economies of scale,that is, the cost advantages of large-scale production. For example, Country A and Country B may have the same capability in producing cars and computers, but the cost for the production of both commodities will decrease if the goods are produced on a larger scale. Both countries might find it advantageous if eachwere to specialize completely in the production of one commodity and import the other.Third, trade takes place because of innovation or style.Even though Country A produces enough cars at reasonable costs to meet its own demand and even to export some, it may still import cars from other countries for innovation or variety of style.To summarize, the theory of international specialization seeks to answer the question which countrieswill produce what goods, with what trade patterns among them. Differences in production conditions, the element highlighted (stressed) by the theory of comparative advantage, provide the most important part of the answer. But a complete answer must also take into account other factors such as patterns of demand, economies of scale and innovation or style.In reality, however, complete specialization may never occur even when it is economicallyadvantageous. For strategic or domestic reasons, a country may continue to produce goods for which it does not have an advantage. The benefits of specialization may also be affected by transport cost. Goods and raw materials have to be transported around the world and the cost of the transport reduces the benefit of trade. The case will be more serious with transporting bulky or perishable goods. Protectionist measures which are often taken by governments are also barriers totrade, and typical examples are tariffs and quotas.Tariff barriers are the most common form of trade restriction. A tariff is a tax levied on a commodity when it crosses the boundary of a customs area which usually coincides with the area of a country.A customs area extending beyond national boundaries to include two or more independent nations is called a customs union. Import duties are tariffs levied on goods entering an (customs) area while export dutiesare taxes levied on goods leaving an (customs) area. The former type is more common than the latter as most nations want to expand exports and increase their foreign exchange earnings (income). Import duties may be either specific, or ad valorem, or a combination of the two –compound duties. The term drawback refers to duties paid on imported goods that are refunded if the goods are reexported. The term most-favored-nation (MFN) treatment refers to a tariff treatment.Under this treatment, a country is required to extend to all signatories (contracting parties) any tariff concessions(关税减让) granted (given) to any participating country. However, MFN treatment is not really special but is just normal trading status. It gives a country the lowest tariffs only within the tariff’s schedule, but it is still possible to have lower tariffs.Quotas or quantitative (quantity) restrictions are the most common form of non-tariff barriers. A quotalimits the imports or exports of a commodity during a given period of time. The limits may be in quantity or value terms, and quotas may be on a country basis or global, without reference to countries. They may be imposed unilaterally and can also be negotiated on a so-called voluntary basis. Obviously, exporting countries do not readily agree to limit their sales. Thus, the “voluntary” label generally means that the importing country has threatened to imposeeven worse restrictions if voluntary cooperation is not forthcoming.In addition to visible trade, which involves the import and export of goods, there is also invisible trade, which involves the exchange of services between countries.Transportation service across national boundaries is an important kind of invisible trade. International transportation involves different means of transport such as ocean ships, planes, trains, trucks andinland water vessels. However, the most important of them is maritime ships. When an exporter arranges shipment, he generally books space in the cargo compartment of a ship, or charter a whole vessel. Some countries such as Greece and Norway have large maritime fleets and earn a lot by way of this invisible trade.Insurance is another important kind of invisible trade. In the course of transportation, a cargo is vulnerable to many risks such ascollision, pilferage, fire, storm, explosion, and even war. Goods being transported in international trade must be insured against loss or damage. Large insurance companies provide service for international trade and earn fees for insuring other nation's foreign trade. Lloyd's of London is a leading exporter of this service.Tourism is yet another important form of invisible trade. Many countries may have beautiful scenery, wonderful attractions,places of historical interest, or merely a mild and sunny climate. These countries attract large numbers of tourists, who spend money for travelling, hotel accommodations, meals, taxis, and so on. Some countries depend heavily on tourism for their foreign exchange earnings, and many countries are making great efforts to develop their tourism.The fourth type of invisible trade meriting (deserving) attention is called immigrant remittance. Thisrefers to the money sent back to home countries by people working in a foreign land. Import and export of labour service may be undertaken by individuals, or organized by companies or even by states. And this is becoming an important kind of invisible trade for some countries.Invisible trade can be as important to some countries as visible trade is to others. In reality, the kinds of trade nations engage in are varied(various) and complex(complicated), often a mixture of visible and invisible trade.。
国际财务管理第六版中文版第五章
The indirect quote for British pound is:
£.5242 = $1
5-11
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
Spot Rate Quotations
Country
USD equiv Friday
Argentina (Peso) 0.3309
Australia (Dollar) 0.7830
Brazil (Real)
0.3735
Britain (Pound) 1.9077
1 Month Forward 1.9044
3 Months Forward 1.8983
the U.S. dollar equivalent e.g. “a Japanese Yen is worth about a penny”
间接标价Indirect Quotation
the price of a U.S. dollar in the foreign currency e.g. “you get 100 yen to the dollar”
Currency per USD Friday 3.0221 1.2771 2.6774 0.5242 0.5251 0.5268 0.5290 1.2442 1.2442 1.2433 1.2412
Currency per USD The direct 0.5226 quote for
非银行交易商 nobank dealers
外汇经纪人FX brokers 俗称中介
中央银行 central banks
5-5
流利说商务英语level6unit2part1(CSR)
Lesson1 CSR terminologyCorporate society responsibilityCorporate social responsibility, or CSR, is the idea that companies should help the society and environment.Through CSR programs, businesses can contribute to society while also boosting their own images.Depending on the company, CSR can take on many forms, like philanthropic giving. PhilanthropyPhilanthropy is when a corporate donates money to a cause or organization that helps people.Corporate philanthropy is the common approach to CSR.Typical forms of corporate philanthropy include monetary donations and aid given to non-profit organizations and deprived communities.For example, PepsiCo has a program called food for good, which donates healthy meals to children.Hallo effectThe hallo effect is the favorable perception people have of a company.If a company has hallo effect, customers will overlook negative aspects in favor of its positive ones.When a company engages in CSR, it can create an hallo effect for itself.This can improve customer loyalty and give a company reputation for social responsibility. Triple bottom lineThe triple bottom line refers to people, planet and profit.Companies engage in CSR because they believe the well-being of the people, the planet and the company are interrelated.PeoplePeople refers to the human capital bottom line.It calls for fair labor practices and beneficial business practices toward the community where the business operates.PlanetPlanet is the environmental bottom line.It calls for sustainable environmental practice as well as reversing the damage done to the environment.Profit is the economic bottom line.It refers to the economic value created by the organization.Lesson 2 Corporate philanthropyCSR as corporate philanthropyPhilanthropy is a common CSR initiative for many corporations.Many corporations provide charities and non-organizations with financial aid.This aid is given to many different areas including social welfare, the art and education. Case study: Coca-ColaIn 2013, a devastating earthquake struck Ya’an Sichuan.Following the disaster, Coca-cala mobilized its resources across Sichuan and Chongqing to provide relief.They increased the production of bottle to water and shipped it to the affected area.In addition, the company donated 8,000,000 yuan to the China women development foundation.The goal was to provide aid to women who were affected in the earthquake.Through these CSR initiatives, Coca-Cola greatly improved its brand image and long term profitability.Case study: PNC’s Grow up GreatA nother example of corporate philanthropy is the PNC’s financial service Grow Up Great program.The program provides resources to the unfounded schools in the areas where PNC operates.These resources include lesson plans, digital storybooks and learning materials.The goal of the program is the set disadvantaged students on the path to success in the school and life.After its founding in 2004, the program has used 137 million dollars in grant to serve 1.4 million children.T hese CSR activities not only benefit many children but also improve PNC’s profit performance, customer relationship and community engagement.Case study: GoogleGoogle is a prime example of a company that engages in corporate philanthropy.It have donated money and resources to several programs which are involved in helping communities around the world.Google have donated thousands of Raspberry Pi computers to children around world to support computer science education.In the program Code for American, it annually donates 3 million dollars to help develop civic technological solutions.Lesson 3 Value creationCSR as creating shared valueSome CSR is geared towards creating shared value, or CSV.A company creates shared value by addressing a social need while simultaneously boosting its revenue.The premise behind the CSV is that the well-being of a company and society depend on each other.Case study: TeslaOne way to create share values is reconceiving products and markets to meet social needs. Tesla, for example, designs electric vehicles, batteries, and solar panels to address the ecological concerns of society.By doing this, it also expands the market for automotive and energy solution businesses.T esla’s CSR efforts both benefit the society and increase it economic value.Case study: IKEAProducts can also create shared value by redefining productivity in the value chain. Creating shared value can address societal problems while reducing economic costs in a firm’s value chain.For example, IKEA commits to eliminating waste across its value chain by prevention, reduction, reusing and recycling.This can reduce production costs as well as environmental degradation.In 2017, more than 30,000 members joined its loyalty program every day.As a result, its total retail sales increased by 3.8%, reaching 36.3 billion euro.Cast study: NestleCompanies can create shared value by developing the communities they work in.Nestle did this when it change how it obtained its coffee beans.Previously, it obtained its beans from industrial farmers.Later, it started working closely with small farmers in poor areas.Nestle provided the farms with fertilizers, pesticides, and farming advice.It also began to pay the farmers a premium for better quality beans.The result was an increase in income for the farmers while providing Nestle with a higher quality of coffee beans.Lesson 4 Manifestations of CSRSponsorshipSponsorship is money given by a company to support a person or an organization.A company can sponsor events to show its commitment to improving society.For example GasTerra, a green gas company, sponsors Walk for Life, an event which raises money for cancer research in young adults.Disease preventionCSR efforts also include disease prevention.Companies may focus on food safety, dental health, vaccines, and immunization.For example, to improve food safety, a food company may use cleaner ingredients and production methods.Environmental initiativeEnvironmental initiatives are activities that promote environment awareness and sustainability.Sustainability efforts can help companies reduce pollution and energy consumption.A nd other philanthropic activities can also improve the company’s public perception. Ethical labor practiceEthical labor practices refer to fair treatment of employees.They also focus on improving the labor practice of other companies around the world. For example, IKEA has done this by fighting against child labor in the supply chain.。
罗斯公司理财第六版习题答案第6章
罗斯公司理财第六版习题答案第6章Chapter 6: Some Alternative Investment RulesConcept Questions - Chapter 66.2 ?List the problems of the payback period rule.1.It does not take into account the time value of money.2.It ignores payments after the payback period.3.The cutoff period is arbitrary.What are some advantages1.It is simple to implement.2.It may help in controlling and evaluating managers.6.4 ?What are the three steps in calculating AAR?1.Determine average net income.2.Determine average investment3.Divide average net income by average investment.What are some flaws with the AAR approach1.It uses accounting figures.2.It takes no account of timing.3.The cutoff period is arbitrary.6.5 ?How does one calculate the IRR of a project?Using either trial-and-error or a financial calculator, one finds the discount ratethat produces an NPV of zero.6.6 ?What is the difference between independent projects and mutually exclusiveprojects?An independent project is one whose acceptance does not affect the acceptance of another. A mutually exclusive project, on the other hand is one whose acceptance precludes the acceptance of another.What are two problems with the IRR approach that apply to both independent and mutually exclusive projects1.The decision rule depends on whether one is investing of financing.2.Multiple rates of return are possible.What are two additional problems applying only to mutually exclusive projects1.The IRR approach ignores issues of scale.2.The IRR approach does not accommodate the timing of the cash flowsproperly.6.7 ?How does one calculate a project's profitability index?Divide the present value of the cash flows subsequent to the initial investment by the initial investment.How is the profitability index applied to independent projects, mutually exclusive projects, and situations of capitalrationing?1.With independent projects, accept the project if the PI is greater than 1.0 andreject if less than 1.0.2.With mutually exclusive projects, use incremental analysis, subtracting thecash flows of project 2 from project 1. Find the PI. If the PI is greater than1.0, accept project 1. If less than 1.0, accept project2.3.In capital rationing, the firm should simply rank the projects according to theirrespective PIs and accept the projects with the highest PIs, subject to thebudget constrain.Answers to End-of-Chapter ProblemsQUESTIONS AND PROBLEMSThe Payback Period Rule6.1 Fuji Software, Inc., has the following projects.Year Project A Project B0 _$7,500 _$5,0001 4,000 2,5002 3,500 1,2003 1,500 3,000a. Suppose Fuji’s cutoff payback period is two years. Which of these two projects should be chosen?b. Suppose Fuji uses the NPV rule to rank these two projects. If the appropriate discount rate is 15 percent, which project should be chosen?6.1 a. Payback period of Project A = 1 + ($7,500 - $4,000) / $3,500 = 2 yearsPayback period of Project B = 2 + ($5,000 - $2,500 -$1,200) / $3,000 = 2.43 yearsProject A should be chosen.b. NPV A = -$7,500 + $4,000 / 1.15 + $3,500 / 1.152 + $1,500 / 1.153 = -$388.96NPV B = -$5,000 + $2,500 / 1.15 + $1,200 / 1.152 + $3,000 / 1.153 = $53.83Project B should be chosen.6.2 Suppose Peach Paving Company invests $1 million today on a new construction project. The project will generate annual cash flows of $150,000 in perpetuity. The appropriate annual discount rate for the project is 10 percent.a. What is the payback period for the project? If the Peach Paving Company desires to have a 10-year payback period, should the project be adopted?b. What is the discounted payback period for the project?c. What is the NPV of the project?6.2 a. Payback period = 6 + {$1,000,000 - ($150,000 ? 6)} / $150,000 = 6.67 yearsYes, the project should be adopted.A= $974,259b. $150,000 11.010The discounted payback period = 11 + ($1,000,000 - $974,259) / ($150,000 / 1.112)= 11.54 yearsc. NPV = -$1,000,000 + $150,000 / 0.10 = $500,000The Average Accounting Return6.3 The annual, end-of-year, book-investment accounts for the machine whose purchase your firm is considering are shown below.Purchase Year Year Year YearDate 1 2 3 4Gross investment $16,000 $16,000 $16,000 $16,000 $16,000Less: accumulateddepreciation ______0_ ___4_,0_0_0_ ___8_,0_0_0_ __1_2_,0_0_0_ _1_6_,_0_0_0Net investment $16,000 $12,000 $ 8,000 $ 4,000 $ 0If your firm purchases this machine, you can expect it to generate, on average, $4,500 peryear in additional net income.a. What is the average accounting return for this machine?b. What three flaws are inherent in this decision rule?6.3 a. Average Investment:($16,000 + $12,000 + $8,000 + $4,000 + 0) / 5 = $8,000Average accounting return:$4,500 / $8,000 = 0.5625 = 56.25%b. 1. AAR does not consider the timing of the cash flows, hence it does notconsider the time value of money.2. AAR uses an arbitrary firm standard as the decision rule.3. AAR uses accounting data rather than net cash flows.6.4 Western Printing Co. has an opportunity to purchase a $2 million new printing machine. It has an economic life of five years and will be worthless after that time. This new investment is expected to generate an annual net income of $100,000 one year from today and the income stream will grow at 7 percent per year subsequently. The company adopts a straight-line depreciation method (i.e., equal amounts of depreciation in each year). What is the average accounting return of the investment? Supposing Western Printing’s AAR cutoff is 20 percent, should the machine be purchased?6.4 Average Investment = ($2,000,000 + 0) / 2 = $1,000,000Average net income = [$100,000 {(1 + g)5 - 1} / g] / 5= {$100,000A (1.075 - 1} / 0.07} / 5= $115,014.78AAR = $115,014.78 / $1,000,000 = 11.50%No, since the machine’s AAR is less than the firm’s cutoff AAR.6.5 Nokia Group has invested $8,000 in a high-tech project. This cost is depreciated on an accelerated basis that yields $4,000, $2,500, $1,500 of depreciation, respectively, during its three-year economic life. The project is expected to produce income before tax of $2,000 each year during its economic life. If the tax rate is 25%, what is the project’s average accounting return (AAR)?a. 44.44%b. 50.23%c. 66.67%d. 70.00%e. 82.21%The Internal Rate of Return6.5 a6.6 Compute the internal rate of return on projects with the following cash flows.Cash Flows ($)Year Project A Project B0 _3,000 _6,0001 2,500 5,0002 1,000 2,000/ $160,000 = 1.046.6PI = $40,000 715.0Since the PI exceeds one accept the project.6.7 CPC, Inc., has a project with the following cash flows.Year Cash Flows ($)0 _8,0001 4,0002 3,0003 2,000a. Compute the internal rate of return on the project.b. Suppose the appropriate discount rate is 8 percent. Should the project be adopted by CPC?6.7 The IRR is the discount rate at which the NPV = 0.-$3,000 + $2,500 / (1 + IRR A) + $1,000 / (1 + IRR A)2 = 0By trial and error, IRR A = 12.87%Since project B’s cash flows are two times of those of project A, the IRR B = IRR A =12.87%6.8 Compute the internal rate of return for the cash flows of the following two projects.Cash Flows ($)Time A B0 _2,000 _1,5001 2,000 5002 8,000 1,0003 _8,000 1,5006.8 a. Solve x by trial and error:-$4,000 + $2,000 / (1 + x) + $1,500 / (1 + x)2 + $1,000 / (1 + x)3 = 0x = 6.93%b. No, since the IRR (6.93%) is less than the discount rate of 8%.6.9 Suppose you are offered $5,000 today and obligated to make scheduled payments as follows:Year Cash Flows ($)0 5,0001 _2,5002 _2,0003 _1,0004 _1,000a. What is the IRRs of this offer?b. If the appropriate discount rate is 10 percent, should you accept this offer?c. If the appropriate discount rate is 20 percent, should you accept this offer?Chapter 6 Some Alternative Investment Rules 165d. What is the corresponding NPV of the project if the appropriate discount rates are 10 percent and 20 percent, respectively? Are the choices under the NPV rule consistent with those of the IRR rule?6.9 Find the IRRs of project A analytically. Since the IRR is the discount rate that makes the NPVequal to zero, the following equation must hold.-$200 + $200 / (1 + r) + $800 / (1 + r)2 - $800 / (1 + r)3 = 0$200 [-1 + 1 / (1 + r)] - {$800 / (1 + r)2}[-1 + 1 / (1 + r)] = 0[-1 + 1 / (1 + r)] [$200 - $800 / (1 + r)2] = 0For this equation to hold, either [-1 + 1 / (1 + r)] = 0 or [$200 - $800 / (1 + r)2] = 0.Solve each of these factors for the r that would cause the factor to equal zero. Theresulting rates are the two IRRs for project A. They are either r = 0% or r = 100%.Note: By inspection you should have known that one of the IRRs of project A iszero. Notice that the sum of the un-discounted cash flows for project A is zero.Thus, not discounting the cash flows would yield a zero NPV. The discount ratewhich is tantamount to not discounting is zero.Here are some of the interactions used to find the IRR by trial and error.Sophisticated calculators can compute this rate without all of the tedium involved inthe trial-and-error method.NPV = -$150 + $50 / 1.3 + $100 / 1.32 + $150 / 1.33 = $15.91NPV = -$150 + $50 / 1.4 + $100 / 1.42 + $150 / 1.43 = -$8.60NPV = -$150 + $50 / 1.37 + $100 / 1.372 + $150 / 1.373 = -$1.89NPV = -$150 + $50 / 1.36 + $100 / 1.36 2 + $150 / 1.363 = $0.46NPV = -$150 + $50 / 1.36194 + $100 / 1.361942 + $150 / 1.361943= $0.0010NPV = -$150 + $50 / 1.36195 + $100 / 1.361952 + $150 / 1.361953= -$0.0013NPV = -$150 + $50 / 1.361944 + $100 / 1.3619442 + $150 / 1.3619443= $0.0000906Thus, the IRR is approximately 36.1944%.6.10 As the Chief Financial Officer of the Orient Express, you are offered the following two mutually exclusive projects.Year Project A Project B0 _$5,000 _$100,0001 3,500 65,0002 3,500 65,000a. What are the IRRs of these two projects?b. If you are told only the IRRs of the projects, which would you choose?c. What did you ignore when you made your choice in part (b)?d. How can the problem be remedied?e. Compute the incremental IRR for the projects.f. Based on your answer to part (e), which project should you choose?g. Suppose you have determined that the appropriate discount rate for these projectsis 15 percent. According to the NPV rule, which of these two projects should be adopted?6.10 a. Solve r in the equation:$5,000 - $2,500 / (1 + r) - $2,000 / (1 + r)2 - $1,000 / (1 + r)3- $1,000 / (1 + r)4 = 0By trial and error,IRR = r = 13.99%b. Since this problem is the case of financing, accept the project if the IRR is less than the required rate of return.IRR = 13.99% > 10%Reject the offer.c. IRR = 13.99% < 20%Accept the offer.d. When r = 10%:NPV = $5,000 - $2,500 / 1.1 - $2,000 / 1.12 - $1,000 / 1.13 - $1,000 / 1.14= -$359.95When r = 20%:NPV = $5,000 - $2,500 / 1.2 - $2,000 / 1.22 - $1,000 / 1.23 - $1,000 / 1.24= $466.82Yes, they are consistent with the choices of the IRR rule since the signs of the cashflows change only once.6.11 Consider two streams of cash flows, A and B. Cash flow A consists of $5,000 starting three years from today and growing at 4 percent in perpetuity. Cash flow B consists of _$6,000 starting two years from today and continuing in perpetuity. Assume the appropriate discount rate is 12 percent.a. What is the present value of each stream?b. What is the IRR of a project C, which is a combination of projects A and B; that is, C _ A _ B?c. If it is assumed that the discount rate is always positive, what is the rule related to IRR for assessing project C that would correspond to the NPV rule?6.11 a. Project A:NPV = -$5,000 + $3,500 / (1 + r) + $3,500 / (1 + r)2 = 0IRR = r = 25.69%Project B:NPV = -$100,000 + $65,000 / (1 + r) + $65,000 / (1 + r)2 = 0IRR = r = 19.43%b. Choose project A because it has a higher IRR.c. The difference in scale is ignored.d. Apply the incremental IRR method.e.C0C1C2B - A -$95,000 $61,500 $61,500NPV = -$95,000 + $61,500 / (1 + r) + $61,500 / (1 + r)2 = 0Incremental IRR = r = 19.09%f. If the discount rate is less than 19.09%, choose project B.Otherwise, choose project A.g. NPV A = -$5,000 + $3,500 / 1.15 + $3,500 / 1.152 = $689.98NPV B = -$100,000 + $65,000 / 1.15 + $65,000 / 1.152 = $5,671.08 Choose project B.。