BERTOS MANUFACTURING CORPORATION
Evaluating Markets to Invest Abroad
E. N. Roussakis and Anastasios Moysidis
Abstract: This case deals with the key considerations when planning an international
expansion through direct investment in foreign markets. These considerations must be
addressed by a finance company seeking to establish foreign subsidiaries to support the
international sales of its parent firm, a U.S.-based multinational enterprise (MNE). The
company already operates three foreign subsidiaries--in Canada, Mexico (both NAFTA
members), and the United Kingdom--but wishes to increase this network further through
entry into additional markets. Ten candidate countries are being considered to determine
the five most suitable for entry. Hence the need for a rational decision of where to invest.
Keywords: Subsidiaries; multinational enterprise; transnational activities; foreign direct
investment; g r e e n f i e l d i n v e s t m e n t ; l e v e r a g e d i n s t i t u t i o n ; w h o l e s a l e
f i n a n c i n g ; c a p t i v e finance company; retail installment contract
1 Introduction
Victoria Pernarella is a recent university graduate in business administration a n d a new
hire in Bertos Financial Services, Inc., a major finance company in Nashville, Tennessee.
After a m o n t h l o n g r o t a t i o n a l t r a i n i n g t o g a i n i n s i g h t s i n t o th e c o m p a n y ’ s scope
o f activities, she was placed in the international department where she has been assigned
to work on a project. Bill Pappas, her manager, had asked her to analyze a select number
of foreign countries to determine the best prospects for the local establishment of
subsidiary finance companies. He went on to clarify that the mode of entry into the foreign
markets-- acquisition of an existing company or a greenfield investment (from the ground
up, that is, from a green field)--was not a primary consideration at this stage. The
candidate countries were Botswana, Chile, Honduras, Iceland, Indonesia, Kuwait, New Zealand,
Paraguay, Senegal, and Vietnam. With finance companies highly leveraged institutions, the
firm was prepared to provide the initial amount of equity capital needed for the
establishment of five such institutions. At this stage therefore, the study ought
to limit its recommendation to a corresponding number of foreign countries.
With this information at hand, Victoria started reflecting on the approach to use for
her analysis. Sensing the need to prove her capabilities by delivering a high quality study
for her first company assignment, she thought appropriate to first familiarize herself with
the pertinent literature on the international expansion of multinational enterprises (MNE)
in g e n e r a l a n d b a n k s i n p a r t i c u l a r , a n d t h e n r e v i e w b a c k g r o u n d i n f o r m a t i o n
o n h e r employer, and the scop ...
Which countries would be unsuitable for a BFSI subsidiary at thijonghollingberry
Which countries would be unsuitable for a BFSI subsidiary at this time, and what are the basic shortcomings in each case?
BERTOS MANUFACTURING CORPORATION Evaluating Markets to Invest Abroad E. N. Roussakis and Anastasios Moysidis Abstract: This case deals with the key considerations when planning an international expansion through direct investment in foreign markets. These considerations must be addressed by a finance company seeking to establish foreign subsidiaries to support the international sales of its parent firm, a U.S.-based multinational enterprise (MNE). The company already operates three foreign subsidiaries--in Canada, Mexico (both NAFTA members), and the United Kingdom--but wishes to increase this network further through entry into additional markets. Ten candidate countries are being considered to determine the five most suitable for entry. Hence the need for a rational decision of where to invest. Keywords: Subsidiaries; multinational enterprise; transnational activities; foreign direct investment; greenfield investment ; leveraged institution ; wholesale financing ; captive finance company; retail installment contract 1 Introduction Victoria Pernarella is a recent university graduate in business administration and a new hire in Bertos Financial Services, Inc., a major finance company in Nashville, Tennessee. After a month long rotational training to gain insights into the company’s scope o f activities, she was placed in the international department where she has been assigned to work on a project. Bill Pappas, her manager, had asked her to analyze a select number of foreign countries to determine the best pro spects for the local establishment of subsidiary finance companies. He went on to clarify that the mode of entry into the foreign markets-- acquisition of an existing company or a greenfield investment (from the ground up, that is, from a green field)--was not a primary consideration at this stage. The candidate countries were Croatia, Chile, Colombia, Serbia, Philippines, Costa Rica, Australia, Malaysia, Qatar, and Nigeria. With finance companies highly leveraged institutions, the firm was prepared to provide the initial amount of equity capital needed for the establishment of five such institutions. At this stage therefore, the study ought to limit its recommendation to a corresponding number of foreign countries. With this information at hand, Victoria started reflecting on the approach to use for her analysis. Sensing the need to prove her capabilities by delivering a high quality study for her first company assignment, she thought appropriate to first familiarize herself with the pertinent literature on the international expansion of multinational enterprises (MNE) in general and banks in particular, and then review background information o n her employer, and the scope of activities of its financial subsidiary. Hence the sequence of the following sections which address the internationalization process (litera ...
BERTOS MANUFACTURING CORPORATION Evaluating Markets to .docxikirkton
BERTOS MANUFACTURING CORPORATION
Evaluating Markets to Invest Abroad
E. N. Roussakis and Anastasios Moysidis
Abstract: This case deals with the key considerations when planning an international
expansion through direct investment in foreign markets. These considerations must be
addressed by a finance company seeking to establish foreign subsidiaries to support the
international sales of its parent firm, a U.S.-based multinational enterprise (MNE). The
company already operates three foreign subsidiaries--in Canada, Mexico (both NAFTA
members), and the United Kingdom--but wishes to increase this network further through
entry into additional markets. Ten candidate countries are being considered to determine
the five most suitable for entry. Hence the need for a rational decision of where to invest.
Keywords: Subsidiaries; multinational enterprise; transnational activities; foreign direct
investment; greenfield investment; leveraged institution; wholesale financing; captive
finance company; retail installment contract
1 Introduction
Victoria Pernarella is a recent university graduate in business administration and a new
hire in Bertos Financial Services, Inc., a major finance company in Nashville, Tennessee.
After a month long rotational training to gain insights into the company‟s scope of
activities, she was placed in the international department where she has been assigned to
work on a project. Bill Pappas, her manager, had asked her to analyze a select number of
foreign countries to determine the best prospects for the local establishment of subsidiary
finance companies. He went on to clarify that the mode of entry into the foreign markets--
acquisition of an existing company or a greenfield investment (from the ground up, that is,
from a green field)--was not a primary consideration at this stage. The candidate countries
were Argentina, Australia, Brazil, China, France, Netherlands, Russia, Switzerland,
Turkey, and Venezuela. With finance companies highly leveraged institutions, the firm
was prepared to provide the initial amount of equity capital needed for the establishment
of five such institutions. At this stage therefore, the study ought to limit its
recommendation to a corresponding number of foreign countries.
With this information at hand, Victoria started reflecting on the approach to use for
her analysis. Sensing the need to prove her capabilities by delivering a high quality study
for her first company assignment, she thought appropriate to first familiarize herself with
the pertinent literature on the international expansion of multinational enterprises (MNE)
in general and banks in particular, and then review background information on her
employer, and the scope of activities of its financial subsidiary. Hence the sequence of the
following sections which address the internationalization process (literature review on the
development of MNEs), the mod ...
The document discusses foreign direct investment (FDI) and multinational corporations. It examines the article "FDI and Multinationals: Patterns, Impacts and Policies" by A.T. Tavares and S. Young. The document summarizes key points from the article, including the main drivers for firms to engage in FDI, such as accessing new markets or resources. It also classifies FDI based on factors like ownership structure and firm motives. The impacts of FDI from the perspective of host and home countries are outlined, noting concerns about national welfare as well as potential benefits from technology transfer and competitive pressures spurring efficiency.
How western multinationals can organize to win in emerging marketsJuris Cernavskis
This document discusses five main challenges that Western multinational companies face when operating in emerging markets: 1) Mismatched resources where leaders do not allocate the right financial and human resources; 2) Talent shortages and retention issues; 3) Innovation challenges in customizing products at local price points; 4) Increased risk and complexity in stakeholder management; 5) Lack of early and long-term commitment that can lead to "midway profitability traps". The document then outlines four approaches that some companies have taken to overcome these challenges: 1) Managing talent with a local focus; 2) Bringing new approaches to innovation; 3) Building broad and deep partnerships; 4) Creating shared values to unite a global company.
The Relationship between Foreign Trade and Financial Performance of the Liste...IOSRJBM
The main objective of this study was to determine the relationship between foreign trade and financial performance of the listed manufacturing companies in Nigeria. The study focused on the 32 listed companies randomly drawn from the 74 listed manufacturing companies in Nigeria. The secondary data extracted from the financial statement of these companies were subjected to both descriptive and inferential statistics. The result shows a significant positive relationship between the two variables. It was therefore recommended that the management and the board of directors of the listed manufacturing companies should intensify efforts on how the locally produced products will be able to penetrate into the foreign countries as it was discovered that majority of the goods produced by the manufacturing companies in Nigeria are consumed locally
This document provides information about an assignment for an International Business course. It includes instructions to email or call a provided contact for fully solved assignments. It then lists 5 questions related to topics in international trade, multinational corporations, foreign direct investment, and managing individual commitment in MNEs. Students are instructed to attempt all questions and submit the completed assignment by October 31st, 2014.
Human Resources Management Practices and Productivity of Selected Mncs in Eme...inventionjournals
This study investigates the mode of entry of multinational corporation and their performance Nigerian market. Research on the entry mode of multinational companies (MNCs) to Nigerian market has been one of the major topics in the international business, and the performance factor has been regarded as one of the major factors to explain the entry mode selection of MNCs. Based on the developing nature of the Nigerian market, MNCs can enter a market with Franchising, Licensing agreement, Exporting, joint venture or a wholly owned subsidiary, and Turnkey. This study test reasons for entering in the Nigerian market, modes of entering, challenges faced by multinational during entry and finally the impact of mode of entry of MNCs and their performance in the Nigerian market. The research adopted the survey method, with the use of the Questionnaire. The results from the analysis on the first hypothesis show that a MNCs come into the Nigerian market for different reasons with different modes peculiar to their organization. The second hypothesis indicated that there are various challenges MNCs faced when entry into Nigerian market. And the third hypothesis was supported indicating significant influence of mode of entry on the performance of MNCs in Nigerian markets.
Which countries would be unsuitable for a BFSI subsidiary at thijonghollingberry
Which countries would be unsuitable for a BFSI subsidiary at this time, and what are the basic shortcomings in each case?
BERTOS MANUFACTURING CORPORATION Evaluating Markets to Invest Abroad E. N. Roussakis and Anastasios Moysidis Abstract: This case deals with the key considerations when planning an international expansion through direct investment in foreign markets. These considerations must be addressed by a finance company seeking to establish foreign subsidiaries to support the international sales of its parent firm, a U.S.-based multinational enterprise (MNE). The company already operates three foreign subsidiaries--in Canada, Mexico (both NAFTA members), and the United Kingdom--but wishes to increase this network further through entry into additional markets. Ten candidate countries are being considered to determine the five most suitable for entry. Hence the need for a rational decision of where to invest. Keywords: Subsidiaries; multinational enterprise; transnational activities; foreign direct investment; greenfield investment ; leveraged institution ; wholesale financing ; captive finance company; retail installment contract 1 Introduction Victoria Pernarella is a recent university graduate in business administration and a new hire in Bertos Financial Services, Inc., a major finance company in Nashville, Tennessee. After a month long rotational training to gain insights into the company’s scope o f activities, she was placed in the international department where she has been assigned to work on a project. Bill Pappas, her manager, had asked her to analyze a select number of foreign countries to determine the best pro spects for the local establishment of subsidiary finance companies. He went on to clarify that the mode of entry into the foreign markets-- acquisition of an existing company or a greenfield investment (from the ground up, that is, from a green field)--was not a primary consideration at this stage. The candidate countries were Croatia, Chile, Colombia, Serbia, Philippines, Costa Rica, Australia, Malaysia, Qatar, and Nigeria. With finance companies highly leveraged institutions, the firm was prepared to provide the initial amount of equity capital needed for the establishment of five such institutions. At this stage therefore, the study ought to limit its recommendation to a corresponding number of foreign countries. With this information at hand, Victoria started reflecting on the approach to use for her analysis. Sensing the need to prove her capabilities by delivering a high quality study for her first company assignment, she thought appropriate to first familiarize herself with the pertinent literature on the international expansion of multinational enterprises (MNE) in general and banks in particular, and then review background information o n her employer, and the scope of activities of its financial subsidiary. Hence the sequence of the following sections which address the internationalization process (litera ...
BERTOS MANUFACTURING CORPORATION Evaluating Markets to .docxikirkton
BERTOS MANUFACTURING CORPORATION
Evaluating Markets to Invest Abroad
E. N. Roussakis and Anastasios Moysidis
Abstract: This case deals with the key considerations when planning an international
expansion through direct investment in foreign markets. These considerations must be
addressed by a finance company seeking to establish foreign subsidiaries to support the
international sales of its parent firm, a U.S.-based multinational enterprise (MNE). The
company already operates three foreign subsidiaries--in Canada, Mexico (both NAFTA
members), and the United Kingdom--but wishes to increase this network further through
entry into additional markets. Ten candidate countries are being considered to determine
the five most suitable for entry. Hence the need for a rational decision of where to invest.
Keywords: Subsidiaries; multinational enterprise; transnational activities; foreign direct
investment; greenfield investment; leveraged institution; wholesale financing; captive
finance company; retail installment contract
1 Introduction
Victoria Pernarella is a recent university graduate in business administration and a new
hire in Bertos Financial Services, Inc., a major finance company in Nashville, Tennessee.
After a month long rotational training to gain insights into the company‟s scope of
activities, she was placed in the international department where she has been assigned to
work on a project. Bill Pappas, her manager, had asked her to analyze a select number of
foreign countries to determine the best prospects for the local establishment of subsidiary
finance companies. He went on to clarify that the mode of entry into the foreign markets--
acquisition of an existing company or a greenfield investment (from the ground up, that is,
from a green field)--was not a primary consideration at this stage. The candidate countries
were Argentina, Australia, Brazil, China, France, Netherlands, Russia, Switzerland,
Turkey, and Venezuela. With finance companies highly leveraged institutions, the firm
was prepared to provide the initial amount of equity capital needed for the establishment
of five such institutions. At this stage therefore, the study ought to limit its
recommendation to a corresponding number of foreign countries.
With this information at hand, Victoria started reflecting on the approach to use for
her analysis. Sensing the need to prove her capabilities by delivering a high quality study
for her first company assignment, she thought appropriate to first familiarize herself with
the pertinent literature on the international expansion of multinational enterprises (MNE)
in general and banks in particular, and then review background information on her
employer, and the scope of activities of its financial subsidiary. Hence the sequence of the
following sections which address the internationalization process (literature review on the
development of MNEs), the mod ...
The document discusses foreign direct investment (FDI) and multinational corporations. It examines the article "FDI and Multinationals: Patterns, Impacts and Policies" by A.T. Tavares and S. Young. The document summarizes key points from the article, including the main drivers for firms to engage in FDI, such as accessing new markets or resources. It also classifies FDI based on factors like ownership structure and firm motives. The impacts of FDI from the perspective of host and home countries are outlined, noting concerns about national welfare as well as potential benefits from technology transfer and competitive pressures spurring efficiency.
How western multinationals can organize to win in emerging marketsJuris Cernavskis
This document discusses five main challenges that Western multinational companies face when operating in emerging markets: 1) Mismatched resources where leaders do not allocate the right financial and human resources; 2) Talent shortages and retention issues; 3) Innovation challenges in customizing products at local price points; 4) Increased risk and complexity in stakeholder management; 5) Lack of early and long-term commitment that can lead to "midway profitability traps". The document then outlines four approaches that some companies have taken to overcome these challenges: 1) Managing talent with a local focus; 2) Bringing new approaches to innovation; 3) Building broad and deep partnerships; 4) Creating shared values to unite a global company.
The Relationship between Foreign Trade and Financial Performance of the Liste...IOSRJBM
The main objective of this study was to determine the relationship between foreign trade and financial performance of the listed manufacturing companies in Nigeria. The study focused on the 32 listed companies randomly drawn from the 74 listed manufacturing companies in Nigeria. The secondary data extracted from the financial statement of these companies were subjected to both descriptive and inferential statistics. The result shows a significant positive relationship between the two variables. It was therefore recommended that the management and the board of directors of the listed manufacturing companies should intensify efforts on how the locally produced products will be able to penetrate into the foreign countries as it was discovered that majority of the goods produced by the manufacturing companies in Nigeria are consumed locally
This document provides information about an assignment for an International Business course. It includes instructions to email or call a provided contact for fully solved assignments. It then lists 5 questions related to topics in international trade, multinational corporations, foreign direct investment, and managing individual commitment in MNEs. Students are instructed to attempt all questions and submit the completed assignment by October 31st, 2014.
Human Resources Management Practices and Productivity of Selected Mncs in Eme...inventionjournals
This study investigates the mode of entry of multinational corporation and their performance Nigerian market. Research on the entry mode of multinational companies (MNCs) to Nigerian market has been one of the major topics in the international business, and the performance factor has been regarded as one of the major factors to explain the entry mode selection of MNCs. Based on the developing nature of the Nigerian market, MNCs can enter a market with Franchising, Licensing agreement, Exporting, joint venture or a wholly owned subsidiary, and Turnkey. This study test reasons for entering in the Nigerian market, modes of entering, challenges faced by multinational during entry and finally the impact of mode of entry of MNCs and their performance in the Nigerian market. The research adopted the survey method, with the use of the Questionnaire. The results from the analysis on the first hypothesis show that a MNCs come into the Nigerian market for different reasons with different modes peculiar to their organization. The second hypothesis indicated that there are various challenges MNCs faced when entry into Nigerian market. And the third hypothesis was supported indicating significant influence of mode of entry on the performance of MNCs in Nigerian markets.
This document provides an outline for Chapter 19 of a textbook on multinational finance. The chapter discusses the multinational finance function and how companies raise funds globally. It covers external sources like global debt and equity markets as well as internal sources through intercompany transfers. The chapter also explores foreign exchange risk management, international capital budgeting, taxation issues for multinational enterprises, and how companies finance imports and exports. An opening case study describes how Nu Skin Enterprises manages currency risk across its operations in many countries.
This chapter discusses international finance, accounting, and investment decisions from the perspective of a marketing manager. It explains how financial decisions can constrain marketing strategies. International money management, accounting practices, and the challenges of transferring funds across borders are described. The process for developing, selling, and reviewing international investment proposals is also summarized.
Role of venture capital in the development of Rajasthan: Entrepreneurs perspe...inventionjournals
: Since independence there is significant improvement in the economic and social development of
Rajasthan for which role of venture capitalist is important. in this paper the researcher indented to highlight
the different industrial sector of Rajasthan which got benefited by different venture capitalist . and Also efforts
are made to determine the entrepreneurs perception regarding the role of venture capital for smooth
functioning of newly established companies. The research design used is exploratory in nature. The data is
being collected from the entrepreneurs of Rajasthan, RVCF and other websites, hence this research is based on
primary and secondary data. Correlation is used to determine the relationship between the role of venture
capital and development of Rajasthan . The results of this study would help venture capitalist to modify their
role and policies according to the changing needs of state’s entrepreneurs which will facilitate it’s adoption by
rural.
Key
Mridul arora final paper deloitte banking and financeMridul Arora
The document discusses various factors involved in pricing private equity transactions, including understanding the industry, valuation parameters, and estimating variables like EBITDA, enterprise value, and equity value. It also examines macro trends in private equity markets like growth in emerging markets and participation of investment banks and hedge funds. Pricing models focus on valuation metrics like EBITDA multiples, present value of future cash flows, and market ratios for listed companies.
The uppsala internationalization process model revisitedAfzaal Ali
This document summarizes revisions made to the Uppsala Internationalization Process Model. The original 1977 model proposed that firms gradually increase their foreign market commitments starting with occasional exporting to nearby countries and psychically close markets, then establishing sales subsidiaries and eventually production facilities. The revised model emphasizes that internationalization occurs through business networks and relationships. Firms learn from partners, build trust over time, and identify new opportunities collaboratively. The revised model better explains rapid internationalization patterns through acquisitions and born global firms. It suggests future research could study when liability of foreignness versus liability of outsidership impact market entry and integrate the network perspective with internalization theory and eclectic paradigm.
Exporting is a popular foreign market entry strategy that allows firms to sell products abroad while maintaining domestic manufacturing operations. It provides flexibility and low risk compared to strategies requiring foreign direct investment. Effective exporting requires managing documentation for international shipments, using appropriate payment methods like letters of credit, and addressing financial issues such as the cost of financing exports.
330 PARTS • KEY STRATEGIC-MANAGEMENT TOPICS DomQ Great in.docxgilbertkpeters11344
330 PARTS • KEY STRATEGIC-MANAGEMENT TOPICS
Do'mQ Great in a Weak Economy. How?
Marriott International
Among all hotels, casinos, and resorts, Marriott International scored the highest on Fortune's
"Most Admired Companies" both in 2007 and 2008.
When most firms were struggling, Marriott made $362
million in net income on $12.88 billion in revenues,
quite impressive for a hotel/motel firm in 2008. Fortune
rated Marriott as their 13th overall "Most Admired
Company in the World" in terms of their management
and performance. Marriott is looking past the current
slump in travel by planning to open 130 new hotels in
the next four years. About half of the new hotels are
targeted for emerging markets such as China, India,
and the United Arab Emirates. The new hotels will add
32,000 rooms to Bethesda, Maryland-based Marriott's
capacity of 560,000 rooms at 3,178 properties. Marriott
declared a new stock dividend in August 2009.
Marriott is one of the world's leading hoteliers, with
some 3,000 properties in more than 65 countries,
including Renaissance Hotels and Marriott Hotels &
Resorts, as well as Courtyard and Fairfield Inn, It also
owns the Ritz-Carlton and time-share properties oper-
ated by Marriott Vacation Club International. Marriott
additionally provides more than 2,000 rental units for
corporate housing and manages 45 golf courses. The
Marriott family, including CEO J. W. Marriott Jr., owns
about 30 percent of the firm.
Marriott prefers to manage rather than own proper- ;
ties. The firm is planning to purchase some of the ;
Greenbrier Hotel Corporation's assets, including its historic \
luxury White Sulphur Springs, West Virginia, resort. Then i
Marriott will sell that property to another hotel owner but ?
maintain management rights to the property Greenbrier )
entered Chapter 11 bankruptcy in 2009, which prompted '
Marriott to offer to acquire some of their assets.
1
Source: Based On Geoff Colvin, "The World's Most Admired i
Companies," Fortune (March 16, 2009): 76-86; Rachel Feintzeig and j
Kris Hudson, "Greenbrier Hotel Seeks Chapter 11, Plans to Sell to i
Marriou," Wall Street Journal (March 20, 2009): B3. ;
As illustrated iti Figure 11-1, global considerations impact virtually all strategic deci-
sions. The boundaries of countries no longer can define the limits of our imaginations.
To see and appreciate the world from the perspective of others has become a matter of
survival for businesses. The underpinnings of strategic management hinge on managers
gaining an understanding of competitors, markets, prices, suppliers, distributors,
governments, creditors, shareholders, and customers worldwide. The price and quality
of a firm's products and services must be competitive on a worldwide basis, not just on
a local basis. As indicated above, Marriott International is an example global business
that performed outstandingly well during the recent global recession.
The World Trade Organizati.
1) The document discusses how differences in legal and financial systems across countries affect firms' ability to obtain external financing to fund growth.
2) It finds that countries with more efficient legal systems, as well as active stock markets and large banking sectors, see a greater proportion of firms relying on long-term external financing like debt and equity to fund growth.
3) This is partly because firms in countries with well-functioning institutions have lower profit rates, making them more reliant on external capital to finance investment and growth opportunities.
InstructionsWrite a paper about the International Monetary Syste.docxvanesaburnand
Instructions
Write a paper about the International Monetary System that addresses each of the following issues:
· Define the International Monetary System and outline the history of the system.
· Describe and provide examples of what is meant by “currency regimes,” and define selected types of regimes and form an argument for selecting fixed exchange rate and arguments for selecting flexible exchange rates.
· Describe and define the creation of the Euro and discuss the benefits as well as the problems associated with the creation of this currency.
Support your paper with at least five (5) resources. In addition to these specified resources, other appropriate scholarly resources, including older articles, may be included. Your paper should demonstrate thoughtful consideration of the ideas and concepts that are presented in the course and provide new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards.
Length: 5-7 pages (not including title and reference pages).
Eiteman, D., Stonehill, M., & Moffett, M. (2016). Multinational business finance. Boston, MA: Prentice-Hall.
Read Chapters 1, 2
This is a major resource, however, I think the assignment can be accomplished without it. I can’t seem to be able to download the book.
The global company's challenge.
Authors:
Dewhurst, Martin1
Harris, Jonathan2
Heywood, Suzanne
Aquila, Kate
Source:
McKinsey Quarterly. 2012, Issue 3, p76-80. 5p.
Document Type:
Article
Subject Terms:
*International business enterprises
*Emerging markets
*Economies of scale
*Contracting out
*Risk management in business
*Business models
*Executives
*Financial leverage
*Globalization
*Research & development
Developing countries
Company/Entity:
International Monetary Fund DUNS Number: 069275188
Aditya Birla Management Corp. Pvt. Ltd.
International Business Machines Corp. DUNS Number: 001368083 Ticker: IBM
NAICS/Industry Codes:
919110 International and other extra-territorial public administration
928120 International Affairs
541712 Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
541711 Research and Development in Biotechnology
Abstract:
The article focuses on the management of risks, costs, and strategies by international businesses in emerging markets. It states that the International Monetary Fund reported that the ten fastest-growing economies after 2012 will all be in developing countries. It mentions that technology company International Business Machines expects by 2015 to earn 30 percent of revenues in emerging markets compared to 17 percent in 2009, while Indian multinational conglomerate Aditya Birla Group earns over half of its revenue outside India and has operations in 40 nations. It talks about the benefit of economies of scale in shared services enjoyed by large global companies and comments that the ability to outsource business services and manufacturing is benefiting local busine.
This document discusses evaluating a firm's readiness for internationalization. It proposes a new framework for assessing small and medium-sized enterprises (SMEs) that want to increase their chances of success in internationalization. The framework goes beyond traditional "go or no go" export diagnostic models, which are outdated given changes in international business. It considers a broader range of international operations for SMEs beyond just exporting. The proposed framework specifies an SME's preparedness and defines preliminary axes in terms of product-market combinations and internationalization modalities. The framework was developed through a literature review, expert panel, and validating its practical application with 54 Canadian SMEs entering international markets over 4 years.
Peer-to-peer lending and equity crowdfunding have grown rapidly since the crisis and have attracted the attention of governments who wish to facilitate alternative forms of capital allocation. This report investigates the nature of Financial Return crowdfunding, including outlining the main benefits and risks of the industry and the global regulatory environment the industry currently operates in.
MNCs and globalization go hand-in-hand. After reading this weeks.docxraju957290
MNCs and globalization go hand-in-hand. After reading this week's lesson, find an MNC and describe ways it has been a good citizen or a bad citizen. Don't use Nestle since it is described in the lesson.
Instructions: Your initial post should be at least 350 words. Please respond to more than 2 other students. Responses should be a minimum of 150 words and include direct questions, evidence from the literature, alternative points of view or additional insight. For more information, please review the forum discussion rubric attached below. This is the rubric that will be used for all of the forums in this class.
In this lesson we will discuss another type of non-state actor in the international system. Multinational corporations (MNCs), broadly defined, are business entities that have facilities—whether production, administrative, or distribution-related—in two or more different countries. The influence of MNCs in the international system demonstrates how foreign relations and economics are intertwined. MNCs are a relatively recent development, and although they do not have the political sovereignty or military strength possessed by states, they still exert considerable influence over the international system. MNCs also have a mixed reputation in terms of the benefits they provide and the harm they can cause, especially in the poor countries where they often locate production.
· Defining multinational corporations (MNCs)
· Types of MNCs and their characteristics
· Why MNCs exist
· How MNCs influence the international system: benefits and disadvantages
Multinational corporations are some of the most powerful non-state actors in the international system. Some researchers distinguish between a multinational corporation (MNC), which has headquarters in multiple countries, and a transnational corporation (TNC), which is headquartered in one country by operates in others as well. Because these terms are often used interchangeably in common usage, for the purposes of this lesson we will just use the term MNC to mean any company operating in multiple countries.
LOCATED IN MULTIPLE COUNTRIES
There is actually no agreed-upon definition of what constitutes a multinational corporation. Generally speaking, an MNC hosts some part of its operations in a country other than the one where it is legally headquartered. In that sense, it is literally multi-national.
CORPORATION
A corporation is a group of people, such as a company, that is legally authorized to act as a single entity. It may be privately owned, or publicly traded—meaning that stockholders are legally the corporation’s owners. Economists and legal scholars continue to debate, however, whether there should be more narrow criteria for categorizing MNCs, and what these criteria should be.
OWNERSHIP
Some argue that ownership is the key feature that defines whether a company is an MNC or not. By this narrow definition, a firm is only a multinational if it is owned by nationals of multiple countries. ...
Disruption, a seismic shift in the private equity industryFrenchWeb.fr
This document summarizes the key findings of a survey on the private equity industry. It finds:
1) The private equity industry is facing disruption from relentless increased regulation globally which has forced funds to redesign business models and focus on controlling costs and improving efficiency.
2) Funds are struggling to meet complex new compliance requirements while transforming operations and adopting new digital technologies, but existing technology solutions are inefficient.
3) Regulations have increased demand for new skills among finance teams, but funds are facing talent shortages, forcing them to look outside the industry and consider outsourcing functions.
Unit 1: Environmental Context of International Business, Framework for analyzing international
business environment – Domestic, foreign and global environments and their impact on
international business decisions.
Global Trading Environment: World trade in goods and services – Major trends and developments;
World trade and protectionism – Tariff and non-tariff barriers; Counter trade.
Unit 2: International Financial Environment: Foreign investments -Pattern, Structure and effects;
Movements in foreign exchange and interest rates and then impact on trade and investment flows.
Unit 3: International Economic Institutions and Agreements: WTO, IMF, World Bank UNCTAD,
Agreement on Textiles and Clothing (ATC), GSP, GSTP and other International agreements;
International commodity trading and agreements.
Unit 4: Multinational Corporations and their involvement in International Business: Issues in
foreign investments, technology transfer, pricing and regulations; International collaborative
arrangements and strategic alliances.
Unit 5: Regional Economic Groupings in Practice: Regionalism vs. multilaterallism, Structure and
functioning of EC and NAFTA; Regional economic cooperation. Emerging Developments and
Other Issues: Growing concern for ecology; Counter trade; IT and international business.
The document discusses various aspects of globalization including:
1) Globalization refers to the increasing integration and interaction between countries through international trade, flow of capital and technology.
2) Key drivers of globalization include multinational corporations, the WTO, World Bank and IMF.
3) Firms operate globally to access new markets, raw materials, labor and gain economies of scale. However, globalization benefits are not evenly distributed.
There are several strategies for entering foreign markets, including direct exporting, licensing, franchising, partnering, joint ventures, buying an existing company, piggybacking, turnkey projects, and greenfield investments. Each strategy has advantages and disadvantages depending on factors like tariffs, required product adaptation, costs, and regulations. Partnering and joint ventures allow sharing of risks, resources, and local knowledge but can also create competition if not structured properly. Turnkey projects provide a complete solution for complex infrastructure projects but local subcontracting opportunities. Greenfield investments require the most involvement but may be necessary due to various market factors.
International financial management involves managing finance in an international business environment through foreign currency exchange. The main objective is to maximize shareholder wealth. It includes functions like fund generation, deployment, and risk management of financing and investment decisions. Practitioners require knowledge of factors like exchange rates, interest rates, economic indicators, and political risks across countries. Common international business methods include licensing, franchising, subsidiaries and acquisitions, strategic alliances, and exporting.
This document provides an overview of business environment and globalization. It defines business and discusses their characteristics. It also explains the importance of studying business environment and discusses tools for analyzing environment like PESTLE analysis. The document discusses the stages of globalization and various strategies companies use for globalization like exporting, licensing, mergers and acquisitions. It also discusses benefits and drawbacks of globalization. Finally, it provides an overview of World Trade Organization and their objectives, functions and major agreements.
Problem 1
Problem 2 (two screen shots)
Problem 3 (two screen shots)
Problem 4 (three screen shots)
Problem 5 (one screen shot)
Problem 6 (six screenshots plus a data table)
.
Problem 20-1A Production cost flow and measurement; journal entrie.docxChantellPantoja184
Problem 20-1A Production cost flow and measurement; journal entries L.O. P1, P2, P3, P4
[The following information applies to the questions displayed below.]
Edison Company manufactures wool blankets and accounts for product costs using process costing. The following information is available regarding its May inventories.
Beginning
Inventory
Ending
Inventory
Raw materials inventory
$
60,000
$
41,000
Goods in process inventory
449,000
521,500
Finished goods inventory
610,000
342,001
The following additional information describes the company's production activities for May.
Raw materials purchases (on credit)
$
250,000
Factory payroll cost (paid in cash)
1,850,300
Other overhead cost (Other Accounts credited)
82,000
Materials used
Direct
$
200,500
Indirect
50,000
Labor used
Direct
$
1,060,300
Indirect
790,000
Overhead rate as a percent of direct labor
115
%
Sales (on credit)
$
3,000,000
The predetermined overhead rate was computed at the beginning of the year as 115% of direct labor cost.
\\\\\
rev: 11_02_2011
references
1.
value:
2.00 points
Problem 20-1A Part 1
Required:
1(a)
Compute the cost of products transferred from production to finished goods. (Omit the "$" sign in your response.)
Cost of products transferred
$
1(b)
Compute the cost of goods sold. (Omit the "$" sign in your response.)
Cost of goods sold
$
rev: 10_31_2011
check my workeBook Links (4)references
2.
value:
5.00 points
Problem 20-1A Part 2
2(a)
Prepare journal entry dated May 31 to record the raw materials purchases. (Omit the "$" sign in your response.)
Date
General Journal
Debit
Credit
May 31
2(b)
Prepare journal entry dated May 31 to record the direct materials usage. (Omit the "$" sign in your response.)
Date
General Journal
Debit
Credit
May 31
2(c)
Prepare journal entry dated May 31 to record the indirect materials usage. (Omit the "$" sign in your response.)
Date
General Journal
Debit
Credit
May 31
2(d)
Prepare journal entry dated May 31 to record the payroll costs. (Omit the "$" sign in your response.)
Date
General Journal
Debit
Credit
May 31
2(e)
Prepare journal entry dated May 31 to record the direct labor costs. (Omit the "$" sign in your response.)
Date
General Journal
Debit
Credit
May 31
2(f)
Prepare journal entry dated May 31 to record the indirect labor costs. (Omit the "$" sign in your response.)
Date
General Journal
Debit
Credit
May 31
2(g)
Prepare journal entry dated May 31 to record the other overhead costs. (Omit the "$" sign in your response.)
Date
General Journal
Debit
Credit
May 31
2(h)
Prepare journal entry dated May 31 to record the overhead applied. (Omit the "$" sign in your response.)
Date
General Journal
Debit
Credit
May 31
2(i)
Prepare journal entry dated May 31 to record the goods transferred from production to finished goods.(Omit the "$" sign in yo.
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Similar to BERTOS MANUFACTURING CORPORATION Evaluating Markets to Inv (20)
Problem 1
Problem 2 (two screen shots)
Problem 3 (two screen shots)
Problem 4 (three screen shots)
Problem 5 (one screen shot)
Problem 6 (six screenshots plus a data table)
.
Problem 20-1A Production cost flow and measurement; journal entrie.docxChantellPantoja184
Problem 20-1A Production cost flow and measurement; journal entries L.O. P1, P2, P3, P4
[The following information applies to the questions displayed below.]
Edison Company manufactures wool blankets and accounts for product costs using process costing. The following information is available regarding its May inventories.
Beginning
Inventory
Ending
Inventory
Raw materials inventory
$
60,000
$
41,000
Goods in process inventory
449,000
521,500
Finished goods inventory
610,000
342,001
The following additional information describes the company's production activities for May.
Raw materials purchases (on credit)
$
250,000
Factory payroll cost (paid in cash)
1,850,300
Other overhead cost (Other Accounts credited)
82,000
Materials used
Direct
$
200,500
Indirect
50,000
Labor used
Direct
$
1,060,300
Indirect
790,000
Overhead rate as a percent of direct labor
115
%
Sales (on credit)
$
3,000,000
The predetermined overhead rate was computed at the beginning of the year as 115% of direct labor cost.
\\\\\
rev: 11_02_2011
references
1.
value:
2.00 points
Problem 20-1A Part 1
Required:
1(a)
Compute the cost of products transferred from production to finished goods. (Omit the "$" sign in your response.)
Cost of products transferred
$
1(b)
Compute the cost of goods sold. (Omit the "$" sign in your response.)
Cost of goods sold
$
rev: 10_31_2011
check my workeBook Links (4)references
2.
value:
5.00 points
Problem 20-1A Part 2
2(a)
Prepare journal entry dated May 31 to record the raw materials purchases. (Omit the "$" sign in your response.)
Date
General Journal
Debit
Credit
May 31
2(b)
Prepare journal entry dated May 31 to record the direct materials usage. (Omit the "$" sign in your response.)
Date
General Journal
Debit
Credit
May 31
2(c)
Prepare journal entry dated May 31 to record the indirect materials usage. (Omit the "$" sign in your response.)
Date
General Journal
Debit
Credit
May 31
2(d)
Prepare journal entry dated May 31 to record the payroll costs. (Omit the "$" sign in your response.)
Date
General Journal
Debit
Credit
May 31
2(e)
Prepare journal entry dated May 31 to record the direct labor costs. (Omit the "$" sign in your response.)
Date
General Journal
Debit
Credit
May 31
2(f)
Prepare journal entry dated May 31 to record the indirect labor costs. (Omit the "$" sign in your response.)
Date
General Journal
Debit
Credit
May 31
2(g)
Prepare journal entry dated May 31 to record the other overhead costs. (Omit the "$" sign in your response.)
Date
General Journal
Debit
Credit
May 31
2(h)
Prepare journal entry dated May 31 to record the overhead applied. (Omit the "$" sign in your response.)
Date
General Journal
Debit
Credit
May 31
2(i)
Prepare journal entry dated May 31 to record the goods transferred from production to finished goods.(Omit the "$" sign in yo.
Problem 2 Obtain Io.Let x be the current through j2, ..docxChantellPantoja184
Problem 2: Obtain Io.
Let x be the current through j2, .
Let .
.
.
.
………..1.
…………2.
.
.
…………3.
……………….4.
Solving these 4 equations we can get .
.
Problem 1:Find currents I1, I2, and I3
Problem 2: Obtain Io
Problem 3:Obtain io
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&R&"Myriad Web Pro,Bold"&20B-13.01
B-13.01
Worksheet 1(a), (b), (c), (d), (e)GENERAL JOURNALDateAccountsDebitCredit04-01-X412-31-X403-31-X512-31-X503-31-X6
&L&"Myriad Web Pro,Bold"&12Name:
Date: Section: &R&"Myriad Web Pro,Bold"&20B-13.01
B-13.01
Problem 2Ace Brick company issued $100,000 of 5-year bonds. The bonds were issued at par on January 1, 20X1, and bear interest at a rate of 8% per annum, payable semiannually.(a)Prepare the journal entry to record the bond issue on January, 20X1.(b)Prepare the journal entry that Ace would record on each interest date.(c)Prepare the journal entry that Ace would record at maturity of the bonds.
&R&"Myriad Web Pro,Bold"&20B-13.06
B-13.06
Worksheet 2(a)(b)(c)GENERAL JOURNAL DateAccountsDebitCreditIssueInterestMaturity
&L&"Myriad Web Pro,Bold"&12Name:
Date: Section: &R&"Myriad Web Pro,Bold"&20B-13.06
B-13.06
Problem 3Erik Food Supply Company issued $100,000 of face amount of 4-year bonds on January 1, 20X1. The bonds were issued at 98, and bear interest at a stated rate of 8% per annum, payable semiannually. The discount is amortized by the straight-line method.(a)Prepare the journal entry to record the initial issuance on January, 20X1.(b)Prepare the journal entry that Erik would record on each interest date.(c)Prepare the journal entry that Erik would record at maturity of the bonds.
&R&"Myriad Web Pro,Bold"&20B-13.08
B-13.08
Worksheet 3(a)(b)(c)GENERAL JOURNAL DateAccountsDebitCreditIssueInterestMaturity
&L&"Myriad Web Pro,Bold"&12Name:
Date: Section: &R&"Myriad Web Pro,Bold"&20B-13.08
B-13.08
Problem 4Horton Micro Chip Company issued $100,000 of face amount of 6-year bonds on January 1, 20X1. The bonds were issed at 103, and bear interest at a stated rate of 8% per annum, payable semiannually. The premium is amortized by the straight-line method.(a)Prepare the journal entry to record the initial issue on January, 20X1.(b)Prepare the journal entry that Horton would record on each interest date.(c)Prepare the journal entry that Horton would record at maturity of the bonds.
&R&"Myriad We.
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Problem 17-1 Dividends and Taxes [LO2]
Dark Day, Inc., has declared a $5.60 per share dividend. Suppose capital gains are not taxed, but dividends are taxed at 15 percent. New IRS regulations require that taxes be withheld at the time the dividend is paid. Dark Day sells for $94.10 per share, and the stock is about to go ex-dividend.
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Ex-dividend price
$
Problem 17-2 Stock Dividends [LO3]
The owners’ equity accounts for Alexander International are shown here:
Common stock ($0.60 par value)
$
45,000
Capital surplus
340,000
Retained earnings
748,120
Total owners’ equity
$
1,133,120
a-1
If Alexander stock currently sells for $30 per share and a 10 percent stock dividend is declared, how many new shares will be distributed?
New shares issued
a-2
Show how the equity accounts would change.
Common stock
$
Capital surplus
Retained earnings
Total owners’ equity
$
b-1
If instead Alexander declared a 20 percent stock dividend, how many new shares will be distributed?
New shares issued
b-2
Show how the equity accounts would change. (Negative amount should be indicated by a minus sign.)
Common stock
$
Capital surplus
Retained earnings
Total owners’ equity
$
Problem 17-3 Stock Splits [LO3]
The owners' equity accounts for Alexander International are shown here.
Common stock ($0.50 par value)
$
35,000
Capital surplus
320,000
Retained earnings
708,120
Total owners’ equity
$
1,063,120
a-1
If Alexander declares a five-for-one stock split, how many shares are outstanding now?
New shares outstanding
a-2
What is the new par value per share? (Round your answer to 3 decimal places. (e.g., 32.161))
New par value
$ per share
b-1
If Alexander declares a one-for-seven reverse stock split, how many shares are outstanding now?
New shares outstanding
b-2
What is the new par value per share? (Round your answer to 2 decimal places. (e.g., 32.16))
New par value
$ per share
Problem 17-4 Stock Splits and Stock Dividends [LO3]
Red Rocks Corporation (RRC) currently has 485,000 shares of stock outstanding that sell for $40 per share. Assuming no market imperfections or tax effects exist, what will the share price be after:
a.
RRC has a four-for-three stock split? (Round your answer to 2 decimal places. (e.g., 32.16))
New share price
$
b.
RRC has a 15 percent stock dividend? (Round your answer to 2 decimal places. (e.g., 32.16))
New share price
$
c.
RRC has a 54.5 percent stock dividend? (Round your answer to 2 decimal places. (e.g., 32.16))
New share price
$
d.
RRC has a two-for-seven reverse stock split? (Round your answer to 2 decimal places. (e.g., 32.16))
New share price
$
Determine the new number of shares outstanding in parts (a) through (d).
a.
New shares outstanding
b.
New shares o.
Problem 1Problem 1 - Constant-Growth Common StockWhat is the value.docxChantellPantoja184
Problem 1Problem 1 - Constant-Growth Common StockWhat is the value of a common stock if the firm's earnings and dividends are growing annually at 10%, the current dividend is $1.32,and investors require a 15% return on investment?What is the stock's rate of return if the market price of the stock is $35?
Problem 2Problem 2 - Preferred Stock Price and ReturnA firm has preferred stock outstanding with a $1,000 par value and a $40 annual dividend with no maturity. If the required rate of return is 9%, what is the price of the preferred stock?The market price of a firm's preferred stock is $24 and pays an annual dividend of $2.50. If the stock's par value is $1,000 and it has no maturity, what is the return on the preferred stock?
Problem 3Problem 3 - Bond Valuation and YieldA bond has a par value of $1,000, pays $50 semiannually and has a maturity of 10 years.If the bond earns 12% per year, what is the price of the bond?RateNperPMTFVTypePVWhat is the yield to maturity for the bond?NperPMTPVFVTypeRateWhat would be the bond's price if the rate earned declined to 8% per year?RateNperPMTFVTypePVIf the maturity period is reduced to 5 years and the required rate of return is 8%, what would be the price of the bond?RateNperPMTFVTypePVWhat is the yield to maturity for the bond when the maturity is 5 years and the required rate of return is 8%?NperPMTPVFVTypeRateWhat generalizations about bond prices, interest rates and maturity periods can be made based on the calculations made above?
Problem 4Problem 4 - Callable BondsThe following bonds have a par value of $1,000 and the required rate of return is 10%.Bond XY: 5¼ percent coupon, with interest paid annually for 20 yearsBond AB: 14 percent coupon, with interest paid annually for 20 yearsWhat is each bond's current market price?Bond XYBond ABRateNperPMTFVTypePVIf current interest rates are 9%, which bond would you expect to be called? Explain.
Exercise 10-5
During the month of March, Olinger Company’s employees earned wages of $69,500. Withholdings related to these wages were $5,317 for Social Security (FICA), $8,145 for federal income tax, $3,366 for state income tax, and $434 for union dues. The company incurred no cost related to these earnings for federal unemployment tax but incurred $760 for state unemployment tax.
Prepare the necessary March 31 journal entry to record salaries and wages expense and salaries and wages payable. Assume that wages earned during March will be paid during April. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
Mar. 31
SHOW LIST OF ACCOUNTS
LINK TO TEXT
Prepare the entry to record the company’s payroll tax expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
Mar. 31
===========================================
E.
Problem 1Prescott, Inc., manufactures bookcases and uses an activi.docxChantellPantoja184
Problem 1Prescott, Inc., manufactures bookcases and uses an activity-based costing system. Prescott's activity areas and related data follows:ActivityBudgeted Cost
of ActivityAllocation BaseCost Allocation
RateMaterials handling$230,000Number of parts$0.50Assembly3,200,000Direct labor hours16.00Finishing180,000Number of finished
units4.50Prescott produced two styles of bookcases in October: the standard bookcase and an unfinished bookcase, which has fewer parts and requires no finishing. The totals for quantities, direct
materials costs, and other data follow:ProductTotal Units
ProducedTotal Direct
Materials CostsTotal Direct
Labor CostsTotal Number
of PartsTotal Assembling
Direct Labor HoursStandard bookcase3,000$36,000$45,0009,0004,500Unfinished bookcase3,50035,00035,0007,0003,500Requirements:1. Compute the manufacturing product cost per unit of each type of bookcase.2. Suppose that pre-manufacturing activities, such as product design, were assigned to the standard bookcases at $7 each, and to the unfinished bookcases at $2 each. Similar analyses
were conducted of post-manufacturing activities such as distribution, marketing, and customer service. The post-manufacturing costs were $22 per standard bookcase and $14 per
unfinished bookcase. Compute the full product costs per unit.3. Which product costs are reported in the external financial statements? Which costs are used for management decision making? Explain the difference.4. What price should Prescott's managers set for unfinished bookcases to earn $15 per bookcase?
Problem 2Corbertt Pharmaceuticals manufactures an over-the-counter allergy medication. The company sells both large commercial containers of 1,000 capsules to health-care facilities
and travel packs of 20 capsules to shops in airports, train stations, and hotels. The following information has been developed to determine if an activity-based costing system
would be beneficial:ActivityEstimated Indirect Activity
CostsAllocation BaseEstimated Quantity of
Allocation BaseMaterials handling$95,000Kilos19,000 kilosPackaging219,000Machine hours5,475 hoursQuality assurance124,500Samples2,075 samplesTotal indirect costs$438,500Other production information includes the following:Commercial ContainersTravel PacksUnits produced3,500 containers57,000 packsWeight in kilos14,0005,700Machine hours2,625570Number of samples700855Requirements:1. Compute the cost allocation rate for each activity.2. Use the activity-based cost allocation rates to compute the activity costs per unit of the commercial containers and the travel packs. (Hint: First compute the total activity
cost allocated to each product line, and then compute the cost per unit.)3. Corbertt's original single-allocation-base costing system allocated indirect costs to produce at $157 per machine hour. Compute the total indirect costs allocated to the
commercial containers and to the travel packs under the original system. Then compute the indirect cost per unit for ea.
Problem 1Preston Recliners manufactures leather recliners and uses.docxChantellPantoja184
Problem 1Preston Recliners manufactures leather recliners and uses flexible budgeting and a standard cost system. Preston allocates overhead based on yards of direct materials. The company's performance report includes the following selected data:Static Budget
(1,000 recliners)Actual Results
(980 recliners)Sales (1,000 recliners X $495)$495,000 (980 recliners X $475)$465,500Variable manufacturing costs: Direct materials (6,000 yds @ $8.80/yard)52,800 (6,150 yds @ $8.60/yard)52,890 Direct labor (10,000 hrs @ $9.20/hour)92,000 (9,600 hrs @ $9.30/hour)89,280Variable overhead (6,000 yds @ $5.00/yard)30,000 (6,510 yds @ $6.40/yard)39,360Fixed manufacturing costs: Fixed overhead60,00062,000Total cost of goods sold$234,800$243,530Gross profit$260,200$221,970Requirements:1. Prepare a flexible budget based on the actual number of recliners sold.2. Compute the price variance and the efficiency variance for direct materials and for direct labor. For manufacturing overhead, compute the variable overhead spending, variable overhead efficiency, fixed overhead spending, and fixed overhead volume variances.3. Have Preston's managers done a good job or a poor job controlling materials, labor, and overhead costs? Why?4. Describe how Preston's managers can benefit from the standard costing system.
Problem 2AllTalk Technologies manufactures capacitors for cellular base stations and other communications applications. The company's January 2012 flexible budget income statement shows output levels of 6,500, 8,000, and 10,000 units. The static budget was based on expected sales of 8,000 units.ALLTALK TECHNOLOGIES
Flexible Budget Income Statement
Month Ended January 31, 2012Per UnitBy Units (Capacitors)6,5008,00010,000Sales revenue$24$156,000$192,000$240,000Variable expenses$1065,00080,000100,000Contribution margin$91,000$112,000$140,000Fixed expenses53,00053,00053,000Operating income$38,000$59,000$87,000The company sold 10,000 units during January, and its actual operating income was as follows:ALLTALK TECHNOLOGIES
Income Statement
Month Ended January 31, 2012Sales revenue$246,000Variable expenses104,500Contribution margin$141,500Fixed expenses54,000Operating income$87,500Requirements:1. Prepare an income statement performance report for January.2. What was the effect on AllTalk's operating income of selling 2,000 units more than the static budget level of sales?3. What is AllTalk's static budget variance? Explain why the income statement performance report provides more useful information to AllTalk's managers than the simple static budget variance. What insights can AllTalk's managers draw from this performance report?
Problem 3Java manufacturers coffee mugs that it sells to other companies for customizing with their own logos. Java prepares flexible budgets and uses a standard cost system to control manufacturing costs. The standard unit.
Problem 1Pro Forma Income Statement and Balance SheetBelow is the .docxChantellPantoja184
Problem 1Pro Forma Income Statement and Balance SheetBelow is the income statement and balance sheet for Blue Bill Corporation for 2013. Based on the historical statements and theadditional information provided, construct the firm's pro forma income statement and balance sheet for 2014.Blue Bill CorporationIncome StatementFor the year ended 2013Projected201220132014Revenue$60,000$63,000Cost of goods sold42,00044,100Gross margin18,00018,900SG&A expense6,0006,300Depreciation expense1,8002,000Earnings Before Interest and Taxes (EBIT)10,20010,600Interest expense1,5001,800Taxable income8,7008,800Income Tax Expense3,0453,080Net income5,6555,720Dividends750800To retained earnings$4,905$4,920Additional income statement information:Sales will increase by 5% in 2014 from 2013 levels.COGS and SG&A will be the average percent of sales for the last 2 years.Depreciation expense will increase to $2,200.Interest expense will be $1,900.The tax rate is 35%.Dividend payout will increase to $850.Blue Bill CorporationBalance SheetDecember 31, 2013Projected20132014Current assetsCash$8,000Accounts receivable3,150Inventory9,450Total current assets20,600Property, plant, and equipment (PP&E)28,500Accumulated depreciation16,400Net PP&E12,100Total assets$32,700Current liabilitesAccounts payable$3,780Bank loan (10%)3,200Other current liabilities1,250Total current liabilities8,230Long-term debt (12%)4,800Common stock1,250Retained earnings18,420Total liabilities and equity$32,700Additional balance sheet information:The minimum cash balance is 12% of sales.Working capital accounts (accounts receivable, accounts payable, and inventory) will be the same percent of sales in 2014 as they were in 2013.$8,350 of new PP&E will be purchased in 2014.Other current liabilities will be 3% of sales in 2014.There will be no changes in the common stock or long-term debt accounts.The plug figure (the last number entered that makes the balance sheet balance) is bank loan.
1
Rough Draft
Rough Draft
Rasmussen College
Metro Dental Care is a dental office that provides affordable, convenient, and high quality of care to patients. As a patient at Metro, I personally believe that Metro Dental Care is one of the best dental clinics around, and that’s why I have chosen this company. Metro Dental Care measures their results by recording patient satisfaction.
Managing financial reports, and the quality of service they provide to their customers. Furthermore, the dentists and staff at Metro Dental Care know how important your smile is. Their mission statement states “We pride ourselves in making your smile look great so you not only look good, but feel confident with your smile.”
Metro Dental Care offers convenience for their patients with more than 40 offices throughout the Minneapolis and St. Paul metro area offering flexible hours including early morning, evening and Saturday appointments. Whether you work or live Metro Dental Care has a location near you. Metro Dental .
Problem 2-1PROBLEM 2-1Solution Legend= Value given in problemGiven.docxChantellPantoja184
This document provides a solution to Problem 2-1. It begins by listing the values given in the problem statement. The document then likely shows the step-by-step work and calculations to arrive at the solution for Problem 2-1, ending with the final answer.
PROBLEM 14-6AProblem 14-6A Norwoods Borrowings1. Total amount of .docxChantellPantoja184
PROBLEM 14-6AProblem 14-6A: Norwoods Borrowings1. Total amount of each installment payment.Present value of an ordinary annuity$200,000Interest per period(i)0.08Number of periods(n)5Total amount of each installment payment($50,091.29)Therefore the total amount of each installment payment is $ 50,091.292.Norwoods Amortization TablePeriod Ending DateBeginning balance Interest expenseNotes PayableCash paymentEnding Balance10/31/15$200,000.00$16,000.00$34,091.29$50,091.29$165,908.7110/31/16$165,909.00$13,272.72$36,818.57$50,091.29$129,090.4310/31/17$129,090.43$10,327.23$39,764.06$50,091.29$89,326.3710/31/18$89,326.37$7,146.11$42,945.18$50,091.29$46,381.1910/31/19$46,381.19$3,710.50$46,380.79$50,091.29$0.403.a) Accrued interest as December 31st 2015Accrued interest expense = $200,000*8%*2/12= $2,666.67. Thus the journal entry is as shown below:DescriptionDr($)Cr($)interest expense $2,666.67 Interest payable $2,666.67b) The first annual payment on the note.Ten more months of interest has accrued $200,000*8%*10/12 =$13,333.33 accrued interest .Therefore the journal entry is as shown below:DescriptionDr($)Cr($)Notes payable$34,091.29interest expense$13,333.33interest payable$2,666.67 Cash$50,091.29
PROBLEM 14-7AProblem 14-7AQuestion 1a) Debt to equity ratiosPulaski CompanyScott Company Total liabilities$360,000.00$240,000.00Total Equity$500,000.00$200,000.00Debt-Equity Ratio0.721.2Question 2The debt to equity ratio measures the amount of debt a company uses has to finance its business for every dollar of equity it has. A higher debt to equity ratio implies that a company uses more debt than equity for financing. In this case, the debt to equity ratio for Pulaski Company is 0.72 which is less than 1 implying that the stockholder's equity exceeds the amount of debt borrowed. Thus Pulaski Company may not likely suffer from risks brought about by huge amount of debts in the capital structure. On the other hand, the debt to equity ratio of Scott Company is 1.2 which is greater than 1 implying that the debt exceeds the totalamount stockholders equity. Huge debts is associated with a lot of risks. First, there is the risk of defaulting whereby the company may be unable to repay its debt and therefore leading to bankruptcy. Second, a company may find it difficult to obtain additional funding from creditors.This is because the creditors prefer companies with low debt to equity ratio. Finally, there is the risks of violating the debt covenants. A covenant is an agreement that requires a company to maintain adequate financial ratio levels. Too much borrowings may violate this covenant. Since ScottCompany has a higher debt to equity ratio, it may experience these risks which may eventually lead to the company being declared bankrupt .
PROBLEM 14-6BProblem 14-6B: Gordon Enterprises Borrowings1. Total amount of each installment payment.Present value of an ordi.
Problem 13-3AThe stockholders’ equity accounts of Ashley Corpo.docxChantellPantoja184
Problem 13-3A
The stockholders’ equity accounts of Ashley Corporation on January 1, 2012, were as follows.
Preferred Stock (8%, $49 par, cumulative, 10,200 shares authorized)
$ 387,100
Common Stock ($1 stated value, 1,937,100 shares authorized)
1,408,700
Paid-in Capital in Excess of Par—Preferred Stock
123,200
Paid-in Capital in Excess of Stated Value—Common Stock
1,496,800
Retained Earnings
1,814,400
Treasury Stock (10,300 common shares)
51,500
During 2012, the corporation had the following transactions and events pertaining to its stockholders’ equity.
Feb. 1
Issued 24,100 shares of common stock for $123,900.
Apr. 14
Sold 6,000 shares of treasury stock—common for $33,800.
Sept. 3
Issued 5,100 shares of common stock for a patent valued at $35,700.
Nov. 10
Purchased 1,100 shares of common stock for the treasury at a cost of $5,700.
Dec. 31
Determined that net income for the year was $456,600.
No dividends were declared during the year.
(a)
Journalize the transactions and the closing entry for net income. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
Feb. 1
Apr. 14
Sept. 3
Nov. 10
Dec. 31
Click if you would like to Show Work for this question:
Open Show Work
LINK TO TEXT
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.
Problem 12-9AYour answer is partially correct. Try again..docxChantellPantoja184
Problem 12-9A
Your answer is partially correct. Try again.
Condensed financial data of Odgers Inc. follow.
ODGERS INC.Comparative Balance Sheets
December 31
Assets
2014
2013
Cash
$ 131,704
$ 78,892
Accounts receivable
143,114
61,940
Inventory
183,375
167,646
Prepaid expenses
46,292
42,380
Long-term investments
224,940
177,670
Plant assets
464,550
395,275
Accumulated depreciation
(81,500
)
(84,760
)
Total
$1,112,475
$839,043
Liabilities and Stockholders’ Equity
Accounts payable
$ 166,260
$ 109,699
Accrued expenses payable
26,895
34,230
Bonds payable
179,300
237,980
Common stock
358,600
285,250
Retained earnings
381,420
171,884
Total
$1,112,475
$839,043
ODGERS INC.Income Statement Data
For the Year Ended December 31, 2014
Sales revenue
$633,190
Less:
Cost of goods sold
$220,800
Operating expenses, excluding depreciation
20,228
Depreciation expense
75,795
Income tax expense
44,466
Interest expense
7,710
Loss on disposal of plant assets
12,225
381,224
Net income
$ 251,966
Additional information:
1.
New plant assets costing $163,000 were purchased for cash during the year.
2.
Old plant assets having an original cost of $93,725 and accumulated depreciation of $79,055 were sold for $2,445 cash.
3.
Bonds payable matured and were paid off at face value for cash.
4.
A cash dividend of $42,430 was declared and paid during the year.
Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
ODGERS INC.Statement of Cash Flows
For the Year Ended December 31, 2014
$
Adjustments to reconcile net income to
$
$
Problem 12-10A
Condensed financial data of Odgers Inc. follow.
ODGERS INC.Comparative Balance Sheets
December 31
Assets
2014
2013
Cash
$ 151,904
$ 90,992
Accounts receivable
165,064
71,440
Inventory
211,500
193,358
Prepaid expenses
53,392
48,880
Long-term investments
259,440
204,920
Plant assets
535,800
455,900
Accumulated depreciation
(94,000
)
(97,760
)
Total
$1,283,100
$967,730
Liabilities and Stockholders’ Equity
Accounts payable
$ 191,760
$ 126,524
Accrued expenses payable
31,020
39,480
Bonds payable
206,800
274,480
Common stock
413,600
329,000
Retained earnings
439,920
198,246
Total
$1,283,100
$967,730
ODGERS INC.Income Statement Data
For the Year Ended December 31, 2014
Sales revenue
$730,305
Less:
Cost of goods sold
$254,665
Operating expenses, excluding depreciation
23,331
Depreciation expense
87,420
Income taxes
51,286
Interest expense
8,892
Loss on disposal of plant assets
14,100
439,694
Net income
$ 290,611
Additional information:
1.
New plant assets costing $188,000 were purchased for c.
Problem 1123456Xf122437455763715813910106Name DateTopic.docxChantellPantoja184
Problem 1123456Xf122437455763715813910106
Name: Date:
Topic One: Mean, Variance, and Standard Deviation
Please type your answer in the cell beside the question.
5. The following is the heart rate for 10 randomly selected patients on the unit. Find the mean, variance, and standard deviation of the data using the descriptive statistics option in the data analysis toolpak.
75, 80, 62, 97, 107, 59, 76, 83, 84, 69
6. The following is a frequency distribution fo the number of times patience use the call light in a days time. X is the number of times the call light is used and f is the frequency (meaning the number of patients). Create a histogram of the data.
Sheet2
Sheet3
EXERCISE 11 USING STATISTICS TO DESCRIBE A STUDY SAMPLE
STATISTICAL TECHNIQUE IN REVIEW
Most studies describe the subjects that comprise the study sample. This description of the sample is called the sample characteristics which may be presented in a table or the narrative of the article. The sample characteristics are often presented for each of the groups in a study (i.e. experimental and control groups). Descriptive statistics are used to generate sample characteristics, and the type of statistic used depends on the level of measurement of the demographic variables included in a study (Burns & Grove, 2007). For example, measuring gender produces nominal level data that can be described using frequencies, percentages, and mode. Measuring educational level usually produces ordinal data that can be described using frequencies, percentages, mode, median, and range. Obtaining each subject's specific age is an example of ratio data that can be described using mean, range, and standard deviation. Interval and ratio data are analyzed with the same type of statistics and are usually referred to as interval/ratio level data in this text.
RESEARCH ARTICLE
Source: Troy, N. W., & Dalgas-Pelish, P. (2003). The effectiveness of a self-care intervention for the management of postpartum fatigue. Applied Nursing Research, 16 (1), 38–45.
Introduction
Troy and Dalgas-Pelish (2003) conducted a quasi-experimental study to determine the effectiveness of a self-care intervention (Tiredness Management Guide [TMG]) on postpartum fatigue. The study subjects included 68 primiparous mothers, who were randomly assigned to either the experimental group (32 subjects) or the control group (36 subjects) using a computer program. The results of the study indicated that the TMG was effective in reducing levels of morning postpartum fatigue from the 2nd to 4th weeks postpartum. These researchers recommend that “mothers need to be informed that they will probably experience postpartum fatigue and be taught to assess and manage this phenomenon” (Troy & Dalgas-Pelish, 2003, pp. 44-5).
Relevant Study Results
“A total of 80 women were initially enrolled [in the study] … twelve of these women dropped out of the study resulting in a final sample of 68.” (Troy & Dalgas-Pelish, 2003, p. 39). The researchers presen.
Problem 1. For the truss and loading shown below, calculate th.docxChantellPantoja184
Problem 1. For the truss and loading shown below, calculate the horizontal
displacement of point "D" using the method of virtual work. Show ALL your work!
HW No. 8 - Part 1
Solution
HW FA15 2 Page 1
Problem 1 Continued
Member L (in.) N (lb) N (in) NnL
HW No. 8 - Part 1
.
Problem 1 (30 marks)Review enough information about .docxChantellPantoja184
Problem 1 (30 marks)
Review enough information about Trinidad Drilling Ltd. to propose a vision and strategic objectives for the company. Develop a balanced scorecard that will help the company achieve this vision and monitor how well it is accomplishing its strategic objectives. Include a strategy map in table format that shows objectives and performance measures, with arrows illustrating hypothesized cause-and -effect relationships. Provide rationale for your strategy map. The body of your report should not exceed 1,000 words. Cite material you used to prepare the response and provide references in an appendix.
Problem 2 (20 marks)
Ajax Auto Upholstery Ltd. manufactures upholstered products for automobiles, vans, and trucks. Among the various Ajax plants around Canada is the Owlseye plant located in rural Alberta.
The chief financial officer has just received a report indicating that Ajax could purchase the entire annual output of the Owlseye plant from a foreign supplier for $37 million per year.
The budgeted operating costs (in thousands) for the Owlseye plant’s for the coming year is as follows:
Materials $15,000
Labor
Direct $12,000
Supervision 4,000
Indirect plant 5,000 19,000
Overhead
Depreciation – plant 6,000
Utilities, property tax, maintenance 2,000
Pension expense 4,500
Plant manager and staff 2,500
Corporate headquarters overhead allocation 3,000 18,000
Total budgeted costs $52,000
If material purchase orders are cancelled as a consequence of the plant closing, termination charges would amount to 10 percent of the annual cost of direct materials in the first year (zero thereafter).
A clause in the Ajax union contract requires the company to provide employment assistance to its former employees for 12 months after a plant closes. The estimated cost to administer this service if the Owlseye plant closes would be $2 million. $3.6 million of next year’s pension expense would continue indefinitely whether or not the plant remains open. About $900,000 of labour would still be required in the first year after closure to decommission the plant. After that, the plant would be sold for an estimated $1 million. Utilities, property taxes, and maintenance costs would remain unchanged in the first year after closure, but disappear when the plant is sold.
The plant manager and her staff would be somewhat affected by the closing of the Owlseye plant. Some managers would still be responsible for managing three other plants. As a result, total management salaries would be about 50% of the current level, starting at closure and remaining into the future.
Required:
Assume you are the company’s chief financial officer. Perform a five-year financial analysis and make a recommendation whether to close the Owlseye plant on this basis. Provide support for and cautions about your recommendation with organized, clearly-labeled data. Use bullet points where appropriate.
Problem 3 (16 marks)
Br.
Problem 1 (10 points) Note that an eigenvector cannot be zero.docxChantellPantoja184
Problem 1 (10 points): Note that an eigenvector cannot be zero, but an eigenvalue can
be 0. Suppose that 0 is an eigenvalue of A. What does it say about A? (Hint: One of the
most important properties of a matrix is whether or not it is invertible. Think about the
Invertible Matrix Theorem and all the ‘good things’ of dealing with invertible matrices)
Problem 5: (20 points): The figure below shows a network of one-way streets with
traffic flowing in the directions indicated. The flow rate along the streets are measured
as the average number of vehicles per hour.
a) Set up a mathematical model whose solution provides the unknown flow rates
b) Solve the model for the unknown flow rates
c) If the flow rates along the road A to B must be reduced for construction, what is
the minimum flow that is required to keep traffic flowing on all roads?
Problem 6 (20 points): Problem 7 (9 points): Prove that if A and B are matrices of the same
size, then tr(A+B)=tr(A)+tr(B)
Given:
Goal:
Proof:
Problem 7 (20 points)*: In the 1990, the northern spotted owl became the center of a
nationwide controversy over the use and misuse of the majestic forests in the Pacific
Northwest. Environmentalists convinced the federal government that the owl was
threatened with extinction if logging continued in the old-growth forests (with trees over
200 years old), where the owls prefer to live. The timber industry, anticipating the loss of
30,000 to 100,000 jobs as a result of new government restrictions on logging, argued that
the owl should not be classified as a “threatened species” and cited a number of published
scientific reports to support its case.
Caught in the crossfire of the two lobbying groups, mathematical ecologists
intensified their drive to understand the population dynamics of the spotted owl. The life
cycle of a spotted owl divides naturally into three stages: juvenile (up to 1 year old),
subadult (1 to 2 years), and adult (over 2 years). The owls mate for life during the subadult
and adult stages, begin to breed as adults, and live for up to 20 years. Each owl pair
requires about 1,000 hectares (4 square miles) for its own home territory. A critical time in
the life cycle is when the juveniles leave the nest. To survive and become a subadult, a
juvenile must successfully find a new home range (and usually a mate).
A first step in studying the population dynamics is to model the population at yearly
intervals, at times denoted by 𝑘𝑘 = 0,1,2, …. Usually, one assumes that there is a 1:1 ratio of
males to females in each life stage and counts only the females. The population at year 𝑘𝑘
can be described by a vector 𝒙𝒙𝒌𝒌 = (𝑗𝑗𝑘𝑘 , 𝑠𝑠𝑘𝑘 , 𝑎𝑎𝑘𝑘 ), where 𝑗𝑗𝑘𝑘 , 𝑠𝑠𝑘𝑘 , and 𝑎𝑎𝑘𝑘 are the numbers of
females in the juvenile, subadult, and adult stages, respectively. Using actual field data from
demographic studies, a rese
Probation and Parole 3Running head Probation and Parole.docxChantellPantoja184
Probation and Parole 3
Running head: Probation and Parole
Probation and Parole
Student Name
Allied American University
Author Note
This paper was prepared for Probation and Parole, Module 8 Check Your Understanding taught by [INSERT INSTRUCTOR’S NAME].
Directions: Respond to the following questions using complete sentences. Your answer should be at least 1 paragraph in length, which must be composed of three to five sentences.
1. What is meant by intermediate punishments and what programs are included in this category?
2. How do intermediate punishments serve to keep down prison populations?
3. Why has electronic monitoring proven so popular?
4. What is meant by shock probation/parole?
5. What are the essential features of the boot camp program?
6. Why has intensive supervision been a public relations success?
7. What are the criticisms of boot camp programs?
8. What has research revealed with respect to intensive supervision?
9. What are the criticisms of electronic monitoring in probation and parole?
10. What are the criticisms leveled at intensive supervision?
11. What are the purposes of and services offered by a day reporting center?
12. Why would heroin addicts who have no intention of giving up drug use voluntarily enter a drug treatment program? What are the advantages of using methadone to treat heroin addicts?
13. Why is behavior modification difficult to use in treating drug abusers?
14. What are the characteristics of chemical dependency (CD) programs?
15. What are the primary characteristics of the therapeutic community (TC) approach for treating drug abusers?
16. What are criticisms of the Alcoholics Anonymous approach?
17. What are the problems inherent in drug testing?
18. What are the typical characteristics of sex offenders? How have sex offender laws affected P/P supervision?
19. What are the pros and cons of restitution and charging offenders fees in probation or parole?
20. What are the problems encountered in using the interstate compact?
.
Problem 1(a) Complete the following ANOVA table based on 20 obs.docxChantellPantoja184
Problem 1:
(a) Complete the following ANOVA table based on 20 observations for the regression equation
(a) Is the overall regression significant? Fill in the missing values in the table.
Source DF SS MS F
Regression ___ 350 ____ ____
Error ___ _____
Total 500
(b) Suppose that you have computed the following sequential sums of squares due to regression:
Regressor Variables in Model SS Regression
………………………………………. 300
……………………………………… 250
…………………………………….. 340
……………………………………. 325
Fill in the missing values in the following “computer output”:
Source DF Partial SS F-value Pr>F
……………………………………………………………………………………….. 0.1245
………………………………………………………………………………………. 0.3841
………………………………………………………………………………………. 0.0042
………………………………………………………………………………………. 0.0401
Problem 2:
The time required for a merchandise to stock a grocery store shelf with a soft drink product as well as the number of cases of product stocked are given below. Consider a linear regression of delivery time against number of cases.
X=number of cases
Y=delivery time
Delivery time number of cases Hat diagonals
1.41 4 0.5077
2.96 6 0.3907
6.04 14 0.2013
7.57 19 0.3092
9.38 24 0.5912
Observations used L.S. Model
4,6,14,19,24
6,14,19,24
4,14,19,24
4,14,19,24
4,6,14,24
4,6,14,19
(a)
Calculate the PRESS statistic for the model .
(b) Calculate the regular residual for the model above. Then, compare these residuals with the PRESS residuals for this model.
Exercises from the Text
Use SAS whenever possible to do these exercises:
# 3.4 on p 122
# 3.5
# 3.8
# 3.15
# 3.21
# 3.27
# 3.28
# 3.31
# 3.38
# 3.39
Example with SAS on Sequential and Partial Sum of Squares
Data Weather;
Title 'Lows and Highs from N&O Jan 28,29,30 1992';
Title2 'using actual numbers (yesterday values)';
input city $ hi2 lo2 yhi ylo thi tlo;
* Mon Tues Wed ;
cards;
seattle 51 44 52 44 59 47
.
.
.
;
proc reg; model thi = yhi hi2 tlo ylo lo2/ss1 ss2;
test tlo=0, ylo=0, lo2=0;
/*-----------------------------------------------
| Showing sequential and partial sums of squares|
| Note t**2 = F relationship for partial F. By |
| hand, construct F to leave out .
Probe 140 SPrecipitation in inchesTemperature in F.docxChantellPantoja184
Probe 1
40 S
Precipitation in inches
Temperature in F
J F M A M J J A S O N D
2
4
6
8
10
12
0
10
20
30
40
50
60
70
80
90
POTET 26.8
Precip 27.1
MAT(F) 59.8
Probe 2
6 S
Precipitation in inches
Temperature in F
J F M A M J J A S O N D
2
4
6
8
10
12
0
10
20
30
40
50
60
70
80
90
POTET 69.2
Precip 124.6
MAT(F) 77.9
Probe 3
57 S
Precipitation in inches
Temperature in F
J F M A M J J A S O N D
2
4
6
8
10
12
0
10
20
30
40
50
60
70
80
90
POTET 21.5
Precip 38.7
MAT(F) 43.5
Probe 4
38 N
Precipitation in inches
Temperature in F
J F M A M J J A S O N D
2
4
6
8
10
12
0
10
20
30
40
50
60
70
80
90
POTET 30.3
Precip 16.5
MAT(F) 53.6
Probe 5
55 N
Precipitation in inches
Temperature in F
J F M A M J J A S O N D
2
4
6
8
10
12
0
10
20
30
40
50
60
70
80
90
POTET 21.3
Precip 28.1
MAT(F) 40.6
Probe 6
43 N
Precipitation in inches
Temperature in F
J F M A M J J A S O N D
2
4
6
8
10
12
0
10
20
30
40
50
60
70
80
90
POTET 25.4
Precip 14.4
MAT(F) 47.2
Probe 7
42 N
Precipitation in inches
Temperature in F
J F M A M J J A S O N D
2
4
6
8
10
12
0
10
20
30
40
50
60
70
80
90
POTET 17.3
Precip 31.2
MAT(F) 26.0
Probe 8
42 N
Precipitation in inches
Temperature in F
J F M A M J J A S O N D
2
4
6
8
10
12
0
10
20
30
40
50
60
70
80
90
POTET 29.6
Precip 38.8
MAT(F) 51.6
Probe 9
18 S
Precipitation in inches
Temperature in F
J F M A M J J A S O N D
2
4
6
8
10
12
0
10
20
30
40
50
60
70
80
90
POTET 66.1
Precip 74.8
MAT(F) 77.7
Probe 10
58 N
Precipitation in inches
Temperature in F
J F M A M J J A S O N D
2
4
6
8
10
12
0
10
20
30
40
50
60
70
80
90
POTET 16.5
Precip 24.8
MAT(F) 36.9
Probe 11
26 N
Precipitation in inches
Temperature in F
J F M A M J J A S O N D
2
4
6
8
10
12
0
10
20
30
40
50
60
70
80
90
POTET 47.6
Precip 3.8
MAT(F) 70.1
Probe 12
29 N
Precipitation in inches
Temperature in F
J F M A M J J A S O N D
2
4
6
8
10
12
0
10
20
30
40
50
60
70
80
90
POTET 44.0
Precip 47.3
MAT(F) 63.2
Probe 4
Probe 2
Probe 10
Probe 5
Probe 6
Probe 7
Probe 11
Probe 12
Probe 8
Probe 9
Probe 3
Probe 1
Map 1
20 N
40 N
60 N
80 N
0
20 S
40 S
60 S
0
1000
miles
Geography 204
Koppen Climate Classification Guidelines
If POTET exceeds Precip then B
BW = POTET more than 2x Precip
(desert)
h = mean annual temp > 18 C (64.4 F)
k = mean annual temp < 18 C (64.4 F)
BS = POTET less than 2x Precip
(steppe)
h = mean annual t.
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This presentation includes basic of PCOS their pathology and treatment and also Ayurveda correlation of PCOS and Ayurvedic line of treatment mentioned in classics.
How to Fix the Import Error in the Odoo 17Celine George
An import error occurs when a program fails to import a module or library, disrupting its execution. In languages like Python, this issue arises when the specified module cannot be found or accessed, hindering the program's functionality. Resolving import errors is crucial for maintaining smooth software operation and uninterrupted development processes.
How to Manage Your Lost Opportunities in Odoo 17 CRMCeline George
Odoo 17 CRM allows us to track why we lose sales opportunities with "Lost Reasons." This helps analyze our sales process and identify areas for improvement. Here's how to configure lost reasons in Odoo 17 CRM
This presentation was provided by Steph Pollock of The American Psychological Association’s Journals Program, and Damita Snow, of The American Society of Civil Engineers (ASCE), for the initial session of NISO's 2024 Training Series "DEIA in the Scholarly Landscape." Session One: 'Setting Expectations: a DEIA Primer,' was held June 6, 2024.
Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...Dr. Vinod Kumar Kanvaria
Exploiting Artificial Intelligence for Empowering Researchers and Faculty,
International FDP on Fundamentals of Research in Social Sciences
at Integral University, Lucknow, 06.06.2024
By Dr. Vinod Kumar Kanvaria
How to Setup Warehouse & Location in Odoo 17 InventoryCeline George
In this slide, we'll explore how to set up warehouses and locations in Odoo 17 Inventory. This will help us manage our stock effectively, track inventory levels, and streamline warehouse operations.
Walmart Business+ and Spark Good for Nonprofits.pdfTechSoup
"Learn about all the ways Walmart supports nonprofit organizations.
You will hear from Liz Willett, the Head of Nonprofits, and hear about what Walmart is doing to help nonprofits, including Walmart Business and Spark Good. Walmart Business+ is a new offer for nonprofits that offers discounts and also streamlines nonprofits order and expense tracking, saving time and money.
The webinar may also give some examples on how nonprofits can best leverage Walmart Business+.
The event will cover the following::
Walmart Business + (https://business.walmart.com/plus) is a new shopping experience for nonprofits, schools, and local business customers that connects an exclusive online shopping experience to stores. Benefits include free delivery and shipping, a 'Spend Analytics” feature, special discounts, deals and tax-exempt shopping.
Special TechSoup offer for a free 180 days membership, and up to $150 in discounts on eligible orders.
Spark Good (walmart.com/sparkgood) is a charitable platform that enables nonprofits to receive donations directly from customers and associates.
Answers about how you can do more with Walmart!"
A workshop hosted by the South African Journal of Science aimed at postgraduate students and early career researchers with little or no experience in writing and publishing journal articles.
BERTOS MANUFACTURING CORPORATION Evaluating Markets to Inv
1. BERTOS MANUFACTURING CORPORATION
Evaluating Markets to Invest Abroad
E. N. Roussakis and Anastasios Moysidis
Abstract: This case deals with the key considerations when
planning an international
expansion through direct investment in foreign markets. These
considerations must be
addressed by a finance company seeking to establish foreign
subsidiaries to support the
international sales of its parent firm, a U.S.-based multinational
enterprise (MNE). The
company already operates three foreign subsidiaries--in Canada,
Mexico (both NAFTA
members), and the United Kingdom--but wishes to increase this
network further through
entry into additional markets. Ten candidate countries are
being considered to determine
the five most suitable for entry. Hence the need for a rational
decision of where to invest.
Keywords: Subsidiaries; multinational enterprise; transnational
activities; foreign direct
investment; g r e e n f i e l d i n v e s t m e n t ; l e v e r a g e d
i n s t i t u t i o n ; w h o l e s a l e
f i n a n c i n g ; c a p t i v e finance company; retail
installment contract
2. 1 Introduction
Victoria Pernarella is a recent university graduate in business
administration a n d a new
hire in Bertos Financial Services, Inc., a major finance company
in Nashville, Tennessee.
After a m o n t h l o n g r o t a t i o n a l t r a i n i n g t o g a
i n i n s i g h t s i n t o th e c o m p a n y ’ s scope
o f activities, she was placed in the international department
where she has been assigned
to work on a project. Bill Pappas, her manager, had asked her to
analyze a select number
of foreign countries to determine the best prospects for the local
establishment of
subsidiary finance companies. He went on to clarify that the
mode of entry into the foreign
markets-- acquisition of an existing company or a greenfield
investment (from the ground
up, that is, from a green field)--was not a primary consideration
at this stage. The
candidate countries were Botswana, Chile, Honduras, Iceland,
Indonesia, Kuwait, New Zealand,
Paraguay, Senegal, and Vietnam. With finance companies
highly leveraged institutions, the
firm was prepared to provide the initial amount of equity capital
needed for the
establishment of five such institutions. At this stage
therefore, the study ought
to limit its recommendation to a corresponding number of
foreign countries.
With this information at hand, Victoria started reflecting on the
approach to use for
her analysis. Sensing the need to prove her capabilities by
delivering a high quality study
3. for her first company assignment, she thought appropriate to
first familiarize herself with
the pertinent literature on the international expansion of
multinational enterprises (MNE)
in g e n e r a l a n d b a n k s i n p a r t i c u l a r , a n d t h e
n r e v i e w b a c k g r o u n d i n f o r m a t i o n
o n h e r employer, and the scope of activities of its financial
subsidiary. Hence the
sequence of the following sections which address the
internationalization process
(literature review on the development o f MNEs), the modes of
bank entry into foreign
markets, b a c k g ro u n d o f parent company, financial
subsidiary and scope of activities, and
developing criteria for country recommendation.
2 Internationalization Process--A Theoretical Perspective
Recent decades have witnessed the internationalization o f
operations of many companies
around the world, and especially U.S. corporations. Although
the extent, form and pattern
of their transnational a c t i v i t i e s v a r y according t o the
characteristics o f the firms,
t h e products t h e y p r o d u c e , a n d t h e m a r k e t s i n
w h i c h t h e y o p e r a t e , t h e y a l l
r e f l e c t t h e dynamics of a changing and increasingly
competitive international
environment. Of the theories that have sought to explain the
transnational activities of
enterprises, the eclectic paradigm (Dunning, 1988) enjoys a
dominant position. This concept
provides a broad framework for the alternate channels of
international economic
4. involvement of enterprises and focuses on the parameters that
influence individual MNE
foreign investment decisions (Buckley and Casson, 1976;
Dunning, 1977). Specifically, the
eclectic paradigm identifies three important determinants in the
transnational activities of
firms-- ownership, location and internalization (OLI). The first
condition of the OLI
configuration states that a firm must possess certain owner-
specific competitive advantage
in its home market that can be transferred abroad if the firm’s
foreign direct investment
(FDI) is to be successful. This advantage must be firm specific,
not easily copied,
transferable, and powerful enough to compensate the firm for
the potential disadvantages
and risks of operating abroad. Certain ownership-specific
competitive advantages enjoyed
in the home market, such as financial strength and economies of
scale, are not necessarily
firm specific because they can be also attained b y other f i r m
s . Similarly, c e r t a i n ty p es
of technology d o not e n su re a firm - specific advantage
because they can be purchased,
licensed or copied. Production and marketing o f differentiated
p r o d u c t s , t o o , can lose
their competitive e d g e to modified versions of such products
promoted by lower pricing
and aggressive marketing.
The second strand in the OLI model stands for location-specific
advantages. That
Is, the foreign m a r k e t m u s t possess c e r t a i n ch
aracteristics t h a t will allow the firm to
exploit its competitive advantages in that market. Choice of
location may be a function of
5. market imperfections or of genuine comparative advantages of
particular places. Other
important considerations t h a t may influence the locational
decision may include a low-
cost but productive labor force, unique sources of raw materials,
form ation of a custom
unions or regional trading bloc, defensive investments to
counter a firm’s competitors, or
centers of advanced technology.
The third component of the OLI paradigm is internalization and
refers to the
importance for a firm to safeguard its competitive position by
maintaining control of its
entire v a l u e c h a i n i n i t s industry. This c a n b e a c
c o m p l i s h e d through f o r e i g n
d i r e c t investment r a t h e r t h a n l i c e n s i n g o r o u
t s o u r c i n g . Transferring
p r o p r i e t a r y i n f o r m a t i o n across national
boundaries within its own organization
w o u l d enable a firm to maintain control of its firm-specific
competitive advantage.
Establishment of wholly owned subsidiaries abroad r e d u c e
s t h e f i n a n c i a l agency
c o s t s t h a t a r i s e f r o m a s y m m e t r i c information,
lack of trust and the need to
monitor foreign partners, vendors, and financial intermediaries.
Further, if the parent firm
funds the operations of its foreign subsidiaries, self-financing e
l i m i n a t e s the need to
observe specific debt provisions t h a t would result from local
financing. If a
multinational firm has access to lower global cost and greater
availability of capital why
subject its operations to local financial norms or share these
important advantages with
6. local joint venture partners, distributors, licensees, and banks
that would probably have a
higher cost of capital.
Of t h e t h r e e p r e m i s e s o f t h e p a r a d i g m
described a b o v e , t h e
s e c o n d s t r a n d (locational a d v a n t a g e ) h a s b e e n
t h e s u b j e c t o f increased
t r e a t i s e . Although i n theory market imperfections and
comparative advantage are key
considerations in determining the attractiveness of particular
locations, in practice firms
have been observed to follow a search pattern influenced by
behavioral factors. As
rational decisions require availability of i n f o r m a t i o n
and f a c t s , d e t e r m i n i n g
where t o i n v e s t a b r o a d f o r t h e f i r s t t i m e i s
significantly m o r e challenging than
where to reinvest abroad. The implication is that a firm learns
from its operations abroad
and what it learns influences subsequent decisions. This premise
l i e s behind tw o related
b e h a v i o r a l t h e o r i e s o f foreign direct in v estm en t
decisions--the behavioral approach
and international network theory. The former, exemplified b y
the S w e d i s h S c h o o l o f
economists (Johansen a n d W i e d e r s h e i m -Paul, 1975;
Johansen a n d V a l h n e , 1 9 7 7 ),
s o u g h t t o e x p l a i n b o t h t h e initial a n d l a t e r F
D I decisions of a sample of Swedish
MNEs based on these firms‟ scope of international operations
over time. The study
identified that these firms favored initially countries in “close
psychic distance”; that is,
7. they tended to invest first in countries that possessed a similar
cultural, legal, and
institutional environment to that of Sweden’s, e.g., in such
countries as Denmark, Finland,
Norway, Germany and the United Kingdom. As the firms gained
know ledge a n d
experience f r o m their initial o p e r a t i o n s, they tended to
accept greater r i s k s b o t h i n
t e r m s of the countries’ p s y c h i c d i s t a n c e a n d t h
e s i z e o f their investments.
The development and growth of Swedish companies over time,
contributed to a
transformation i n the nature of the parent/foreign-subsidiary
relationship. The
international network theory addresses this transformation by
identifying such changes as
the evolution of control from centralized to decentralized,
nominal authority of the parent
firm over the organizational network, foreign subsidiaries
competing with each other and
with the parent for resource allocations, and political coalitions
with competing internal
and external networks.
Some authors (Eiteman et al., 2010) view the
internationalization of operations as
an o u t g r o w t h o f s e q u e n t i a l s t a g e s i n th e d e
v e l o p m e n t o f a f i r m . They r e f e r t o
this progression in the scope of business activity as the
globalization process and identify
three distinct phases. In the domestic phase, a company sells its
products to local
customers, and purchases i t s m anufacturing a n d s e r v i c e
i n p u t s f r o m lo cal v e n d o r s .
As t h e company grows t o b e c o m e a v i s i b l e a n d v
8. i a b l e c o m p e t i t o r a t h o m e ,
i m p e r f e c t i o n s i n f o r e i g n national markets or
comparative advantages of particular
locations translate into market opportunities and provide the
impetus for an expansion
strategy. Entry into one or more foreign markets will make the
company attain the
international trade phase. At this stage the c o m p a n y i m p o
r t s i t s in p u ts f r o m
f o r e i g n s u p p l i e r s a n d e x p o r t s i t s p r o d u c t
s a n d services to foreign buyers. In this
facet, the firm faces increased challenges of its financial
management, o v e r and above the
traditional r e q u i r e m e n t s o f the domestic-only p h a s e
. Exports and imports expose the
firm to foreign exchange risk as a result of currency
fluctuations in global markets.
Moreover, they expose the firm to credit risk management;
assessing the credit quality of
the foreign buyers and sellers is more formidable than in
domestic business. When the firm
senses the need to set up foreign s a l e s and service affiliates,
manufacture abroad or
license foreign firms to produce and service its products, it
progresses to the third phase,
the multinational phase. Many multinational enterprises prefer t
o i n v e s t i n w h o l l y
o w n e d s u b s i d i a r i e s t o m a i n t a i n e f f e c t i v e
c o n t r o l o f t h e i r competitive
advantage and any new information generated through research.
Ownership of assets and
enterprises in foreign countries exposes the firm’s FDI to
political risk-- political events that
9. can undermine the economic viability and performance of the
firm in those c o u n t r i e s .
Political r i s k can range f r o m se iz u re o f property
(expropriation) a n d ethnic strife to
conflict with the objectives of the host government (governance
risk) and limitations on
the ability to transfer funds out of the host country (blocked
funds).
Figure 1 portrays the sequential s t a g e s in a firm’s
international e x p a n s i o n a n d
provides an overview of the globalization process and the FDI
decision. For a firm with a
competitive advantage in i t s h o m e m a r k e t , a t y p i
c a l sequence in i t s
i n t e r n a t i o n a l expansion would be the reach to one or
more foreign markets by first
using export agents and other intermediaries before engaging in
direct dealings with foreign
agents and distributors. As the firm learns more about
foreign market conditions,
payment conventions and financial institutions it feels more
confident in establishing its
own sales subsidiary, s e r v i c e facilities and distribution
system . These moves c u l m i n a t e
in foreign direct investments and control of assets abroad.
Some of these assets may have
been built from the ground up, or acquired through purchase of
an existing firm or
facility. As the level of physical presence in foreign markets
increases so does the size
of foreign direct investment.
10. 3 Modes of Bank Entry into Foreign Markets
Unlike industrial and manufacturing firms, w h i c h have
expanded internationally along
the patterns suggested above (eclectic paradigm and
globalization process), financial
institutions h a v e e n t e r e d f o r e i g n m a r k e t s p r i
m a r i l y i n response t o the n e e d s o f
their business clients. Indeed, this has been the case for
commercial banks, the oldest and
most dominant institution of the U.S. financial system. The
growth of multinational
corporations and the accelerating pace of globalization in
business activity increased the
demand for international financial services and i n d u c e
d the e x p a n s i o n of
b a n k s ’ international operations a n d p r e s e n c e a b r
o a d . Whether p r o a c t i v e l y
(to e n h a n c e o w n growth and profitability) or defensively
(to deny a competitor the
benefit of the client’s business), banks have sought to enter
foreign markets early and
quickly to gain from the first-mover advantage. The rush of
Western banks into Central
and Eastern Europe in the
1990s exemplifies the drive to gain this first-mover advantage
(Hughes and MacDonald,
2004).
In weighing entry into a foreign market a number of factors
must be taken into
account, including the bank’s resources (both financial and
human), projected volume of
international business, k n o w l e d g e o f --and e x p e r i e
n c e w i t h --foreign markets,
11. b a n k i n g structure a n d r e g u l a t i o n i n t h e c o u n
t r i e s t a r g e t e d f o r e n t r y , t a x
c o n s i d e r a t i o n s , and customer profile. A key variable in
the decision process is the
vehicle to be used in the delivery of international services.
Major banks around the
world have used anyone or a combination o f vehicles to
structure their international
o p e r a t i o n s . The lowest possible level of presence in a
foreign market may be attained
through a correspondent banking relationship--using a native
institution t o provide the
financial s e r v i c e s needed in that market. This approach
may be duplicated in one or
more countries abroad, as needed, for the p r o c e s s i n g o f
i n t e r n a t i o n a l transactions.
It e n t a i l s n o i n v e s t m e n t and h e n c e n o
Exposure t o the foreign m a r k e t . Extension o f services
m a y be based on a reciprocal
deposit account between the banks or an individual fee per
transaction. A representative
office e n a b l e s a p h y s i c a l p r e s e n c e i n a f o r e
i g n m a r k e t . However, i t c a n n o t
p r o v i d e traditional banking services; it can only engage in
such activities as serving
as a liaison and performing marketing function for the parent
bank. As it does not
constitute a legal entity it has no legal or tax liability. An
agency may perform more
functions than a representative office but cannot perform all
banking functions (e.g., in the
United States a foreign b a n k a g e n c y m a y e x t e n d l o
c a l l o a n s b u t c a n n o t a c c e p t
12. l o c a l d e p o s i t s ). The principal vehicle used by U.S.
banks in the conduct of their
activities internationall y is the branch office. This office is a
legal and operational part of
the parent bank, backed the full resources of the parent in the
performance of the banking
functions permitted by the host country. Although it requires a
sizable investment it
enables the provision of full banking services, which t h e p r i
o r v e h i c l e s d o n o t . A
branch o f f i c e i s s u b j e c t t o two s e t s o f
regulation--those o f the home country and
those of the host country. A subsidiary is a separate legal entity
organized under the
laws, and hence regulated by the authorities, of the host
country. It is the second most
important vehicle used by commercial banks for the conduct of
banking business, and may
be established as a new organizatio n or through the purchase of
an existing institution.
Whatever the approach used in its establishment, a subsidiary o
f f e r s two important
a d v a n t a g e s o v e r a branch: it may provide for a wider
range of services, and it limits the
liability of the parent bank to the amount of its equity
investment i n that e n t i t y . The
m a i n d i s a d v a n t a g e o f a s u b s i d i a r y i s that i t
m u s t b e separately capitalized from the
parent bank, which may often entail a greater start up
investment than a branch (Rose and
Hudgins, 2010).
U.S. finance companies interested to expand their activities
internationally t a k e
into account many of the same criteria used by banks. In
structuring their international
13. operations U.S. finance companies favor the subsidiary
organizational form because of the
advantages associated with this type of vehicle. Just as in U.S.
financial markets, foreign
financial s u b s i d i a r i e s a r e heavy u s e r s o f debt i n
f i n a n c i n g t h e i r o p e r a t i o n s .
Principal sources of borrowed funds include bank credits and
issues of debt (e.g., bonds)
in capital markets t o finance th eir lending a c t i v i t i e s i n
their respective m a r k e t s
(Madura, 2 0 1 1 ; Gitman et al., 2010). Finance companies are
extremely diversified in their
credit granting activities, offering a wide range of loans, leasing
plans and long term
credit to support capital investment. One of the most important
markets for finance
companies has been the extension of business-oriented financial
services including working
capital loans, revolving credit and equipment lease financing.
4 Background of Parent Company
Bertos Manufacturing Corporation (BMC) is one of the largest
companies of the country
in the manufacturing of construction and mining equipment,
and engines. BMC draws its
origin in a California firm organized in 1890 to manufacture
steam-powered tractors for
farming. The firm was nominally c a p i t a l i z e d and
aspired to make inroads in the local
market by having its tractors plow California fields. However,
soon after the turn of the
14. century, a n a b a n d o n e d m a n u f a c t u r i n g p l a n t
b y a f a i l e d t r a c t o r c o m p a n y i n
a m a j o r manufacturing c e n t e r in Illinois was
instrumental i n the relocation of
operations in the
Midwest. The l o c a t i o n of t h i s c e n t e r on t h e
Mississippi River made i t a
prime transportation hub offering important prospects for the
young company. Indeed, the
move proved a turning point in the development of the
company. Domestic sales grew so
significantly that by 1911 the factory employed a little over 600
individuals. A natural
consequence o f t h e d o m e s t i c m o m e n t u m w a s t h
e f i r m ’ s e n t r y i n t o f o r e i g n
m a r k e t s through tractor exports to Argentina, Mexico, and
Canada.
World W ar II was a company m i l e s t o n e a s it created a
sharp increase i n the
demand for tractors to built airfields and other military
facilities in strategic sites of the
Pacific. However, it was during the post-war construction boom
that the company grew at
a rapid pace. A series of mergers and acquisitions diversified
operations into the current
scope of products and contributed to BMC’s growth to an
industrial company of national
and international dimension. A successful export-oriented
strategy led to the establishment
of a manufacturing venture outside the United States in 1950,
which marked the beginning
of BMC’s development into a multinational corporation.
15. The company operates in two primary lines of business:
machinery and engines.
The machinery line of business designs manufactures and sells
construction, mining, and
forestry machinery, including track and wheel tractors,
hydraulic excavators, pipe layers,
log loaders, off highway trucks, and related parts. The engines
business line designs,
manufactures and sells diesel and natural gas engines and gas
turbines, which, in addition
to their use in the company's own machines and vehicles,
provide power for boats, ships
and locomotives.
The r e c e n t f i n a n c i a l c r i s i s (2008) l e d t o t h e
r e s t r u c t u r i n g of
o p e r a t i o n s a n d renewed management’s commitment to
fuel efficiency, quality,
technology and safety of the company's machinery and engine
products. Overall, BMC
manufactures some 400 products, which are sold both at home,
and abroad t h r o u g h a
network o f dealers. The company has a worldwide network of
220 dealers: 63 dealers in
the United States and 157 in other countries. To accommodate
domestic and international
demand for its products and components the company has built
109 plants in different part
of the world. Of these, 51 plants are located in the United
States and 58 in foreign
countries, namely, Australia, Belgium, Brazil, Canada, England,
France, Germany, Hungary,
India, Indonesia, Italy, Japan, Mexico, the Netherlands,
Northern Ireland, the People's
Republic of China, Poland, Russia, South Africa and Sweden.
16. The c o m p a n y a l s o
l i c e n s e s o r s u b c o n t r a c t s t h e manufacture of
BMC-branded clothing, hats,
footwear, and other consumer products. To s u p p o r t higher
v o l u m e s , growth a n d
n e w p r o d u c t i n t r o d u c t i o n s , BMC’s worldwide
employment is a little over 100,000,
split evenly between the United States and the rest of the world.
Consolidated revenue last
year amounted to about $45 billion and net profit (after taxes)
$3.5 billion (Table 1).
More than half of the total revenue was generated o u t s i d e
the United States, w h i l e the
North American m a r k e t was the single largest source. A
breakdown of revenues by
geographic region is provided in Table 2.
Although this performance represents the culmination of an
effective international
strategy, BMC has been increasingly c o n c e r n e d about its
future potential in the global
market place. Its board of directors has recognized that although
opportunities for future
growth exist, international competition may undermine the
maximization of consolidated
after-tax returns. To offset th e effects of such a trend, the
board, in its last meeting,
decided t o e x p l o r e n e w a v e n u e s f o r g r o w t h .
A t o p p r o s p e c t was t h e
i n t e r n a t i o n a l expansion of financial services to support
the overseas dealer sales of
BMC products.
5 Financial Subsidiary and Scope of Activities
17. Following t h e practice of other industry leaders (e.g.,
General Electric, M o t o r o l a , a n d
Ford Motor Company), BMC established a wholly-owned, and
separately incorporated,
finance co m p a n y t o perform a dual function--to a c c o m
m o d a t e t h e credit n e e d s of the
parent but most importantly to finance parent company sales
(hence the reference to such
a f i r m a s a c a p t i v e f i n a n c e c o m p a n y ).
Established i n N a s h v i l l e ,
T e n n e s s e e , Bertos Financial Services, Inc. (BFSI)
promotes the sale of the parent's
products and services by engaged in the extension of credit.
Specifically, BFSI extends
wholesale financing to, and purchases r e t a i l installment c o
n t r a c t s f r o m , f r a n c h i s e d
d e a l e r s . Also, it offers v a r i o u s forms o f i n s u r a n
c e t o c u s t o m e r s a n d d e a l e r s t o
s u p p o r t t h e p u r c h a s e a n d l e a s e o f equipment.
Table 3 identifies the location of
BFSI offices in the United States and the geographical m ark et
covered by each office.
The company’s domestic network includes 10 regional offices
and a wholly owned
subsidiary, w h i c h engages solely in the financing and
leasing of construction and
trucking industry equipment on a national scale. Table 3 also id
en tifies B F S I ’ s current
p r e s e n c e a b r o a d , which i s limited t o three s u b s i d
i a r i e s located i n the f o l l o w i n g
c o u n t r i e s --Canada and M exico (both m e m b e r s o f
the North American Free Trade
Agreement), and the United Kingdom.
In its last meeting the BMC board felt that if the spectrum of
18. credit activities
pursued a t home c o u l d b e duplicated a b r o a d i t w o u
l d a d d im portant i m p e t u s i n the
company’s international g r o w t h m o m e n t u m . The
board b e l i e v e s t h a t e s t a b l i s h m e n t o f
finance companies in a n a d d i t i o n a l number of s e l
e c t foreign countries would
be instrumental in maximizing corporate investment returns. To
this end it has requested
an in-house study to screen foreign prospects and expressed the
interest to review
recommendations in its forthcoming meeting. It was under these
circumstances that Bill
Papas assigned the task for this study to Victoria.
6 Developing Criteria for Country Recommendation
To screen the best five prospects among the ten candidate
countries for the establishment
of subsidiary finance companies, Victoria thought appropriate
to develop a set of criteria
on which to base her recommendation. Although she could read
idly identify several key
criteria, s h e f e l t s h e s h o u l d g i v e also d u e
consideration t o the rules and regulations
governing bank operations in the candidate countries. Granted
that the objective was not
to set up commercial banks but finance companies; however, the
banking regulatory
framework provided a n i n d i c a t i o n of t h e k i n d o f
c r e d i t a n d f i n a n c i a l
environment prevailing in these countries.
19. Although t h e focus o f her s t u d y w a s the best f i v e
foreign p r o s p e c t s , s h e f e l t
important t o d e f e n d h e r r e c o m m e n d a t i o n by a
l s o a d d r e s s i n g t h e w e a k n e s s e s
o f t h e excluded countries. She realized that this
classification was only pertinent under
present circumstances and that some of the excluded countries
could realize latent
opportunities to qualify for entry at a later time.
7 Assignment
1. Identify the key criteria and considerations that need to be
taken into account in
evaluating BFSI entry in the proposed foreign markets.
2. Of the countries under consideration, which five would be
most suitable for the
immediate establishment of a BFSI subsidiary? Highlight the
key issues for each of the
selected countries and discuss the reasoning behind your
recommendation.
3. Which countries would be unsuitable for a BFSI subsidiary at
this time, and what are
the basic shortcomings in each case?
21. Table 3 Bertos Financial Services, Inc.: Operations in the
United States and abroad
___ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
_ _ _ _ __ _ _
Domestic Offices and Market Area Covered
Charlotte, North Carolina: Charlotte Area
Tempe, Arizona: Denver Area
Weatogue, Connecticut: Hartford Area
Houston, Texas: Houston Area
Jacksonville, Florida: Jacksonville Area
Rancho Santa Margarita, California: Los Angeles Area
Lenexa, Kansas: Minneapolis Area
Brentwood, Tennessee: Nashville/Indianapolis Area
Peoria, Illinois: Peoria Area
Bellevue, Washington: Seattle Area
Atlanta, Georgia: U.S. Equipment Financing Inc.
22. Subsidiary Companies Abroad
Canada
Bertos Financial Services, Inc.
Toronto, Ontario
Mexico
Grupo Financiero Bertos Mexico, S.A. de C.V.
Monterrey, Nuevo León
United Kingdom
Bertos Financial Services Limited
Birmingham, West Midlands
___ _ _ _ _ _ _ _ _ _ _ _ _ _
_ _ _ _ _ _ __ _ __
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