Answer:
Transaction exposure deals with cash flows already contracted for, while operating exposure deals with future cash flows that might change because of changes in exchange rates
Explanation:
Transaction exposure deals with changes in cash flow due to default of counter party in making the amount promised available to our business at the contracted time.This would necessitates looking elsewhere for short-term funding,should the default arises.
On other hands,operating exposure results from fluctuation in exchange rate.If domestic exchange rate strengthens,the local equivalence of a foreign currency receivable in future reduces,hence the shortfall is due to operating exposure.
A competitive analysis.
A competitive analysis examines the strengths and weaknesses of your competition in relation you your business.
Answer:
$12.60
Explanation:
The computation of the current value of the stock is shown below:-
= $1.40 × (1.08) ÷ 1.16 + 1.40 × (1.08)^2 ÷ (1.16)^2 + 1.40 × (1.08)^3 ÷ (1.16)^3 + 1.40 × (1.08)^3 × (1.03) ÷ (0.16 - 0.03) × (1.16)^3
= $1.3034 + $1.2136 + $1.1299 + $8.9520
= $12.60
Therefore for computing the current value of stock we simply solved the above equation.
Answer:
Ways in which multinational corporations are able to reduce their global exposure to tax liabilities are given below
Explanation:
There are a lot of different ways of reducing global exposure to tax liabilities a multinational corporations can opt for. Some of the ways are mentioned below.
1. Transfer pricing is an strategy for setting a transaction price between the organizations under the same ownership or control.
2. Payments for intangibles is a strategy where no taxes are paid due to the keeping of intellectual property rights.
3. Profit shifting strategy is usually used to avoid large tax rates by transferring the profits to tax haven countries or areas where the tax rate is very low.
4. Corporate debt-equity is a strategy usually used for reducing taxable profits in high tax countries.
5. The Conduit technique is used by the organization to channel their money through a country to assist favorable tax rates.
Benefits
- High transparency and efficiency in all tax-related processes.
- Transaction costs can be minimized.