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Multiple choice

Assume that liquid funds can be invested to yield 8 percent. If annual remittance checks total $3 billion, what is it worth for the firm to reduce float by 1 day?

a. $688,349
b. $24,000,000
c. $657,534
d. $54,833

An important (additional) consideration for a direct foreign investment is ________.
a. political risk
b. maximizing the firm's profits
c. attaining a high international P/E ratio
d. maintaining the domestic cost of capital

All of the following are examples of political risk for a U.S. company investing in a foreign country except:
a. expropriation of plant and equipment
b. the problem of blocked funds
c. substantial changes in foreign country tax laws
d. government requirements that ownership must be limited to U.S. citizens

Solution Preview

1. The savings in interest for 1 day would be 3,000,000,000 X 8% X ...

Solution Summary

The solution explains some multiple choice questions relating to amount of 1 day float; direct foreign investment issue; political risk