A Multinational Established a Division in a South American Country

question 94

Essay

A multinational established a division in a South American country as a subsidiary corporation,with an initial investment in total assets of 13 million CU's (the local currency is CU's),which cost the company $3,250,000 Canadian at the time.The company sent an experienced manager to run the division,and gave her a target of 13% required rate of return,promising a bonus if this was met and/or exceeded.
After one year,the subsidiary manager was pleased to report a 20% ROI.
You have been able to determine the following data pertaining to the subsidiary:
∙ Exchange rate at end of year was 8 CU's to 1 Cdn dollar
∙ Operating income was earned evenly throughout the year
∙ The exchange rate changed approximately evenly throughout the year
Required:
a.Calculate the subsidiary's income in CU's.
b.Calculate the subsidiary's return on investment in Canadian dollars.
c.Calculate the subsidiary's residual income in Canadian dollars.

Recognize the importance of environmental factors and community infrastructure in disease prevention.

Understand the historical development of public health initiatives and their impact on community health.

Analyze the role of government and non-governmental organizations in the advancement of public health.

Identify key figures and their contributions to public health and nursing.

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Definitions:

Skimming Strategy

A pricing tactic that involves setting a high price for a new product to maximize profits from segments willing to pay more, before lowering the price over time.

Price Insensitivity

A condition where the demand for a product is unresponsive or less sensitive to changes in its price.

Product Sampling

A promotional tactic where customers are given a sample of a product for free with the goal of increasing awareness or boosting sales.

Initial Purchase

The first time a customer buys a product or service from a business, marking the beginning of the consumer-brand relationship.