27) INTERNATIONAL FINANCE. Suppose you wish to invest $50,000 today in German se

Question

27) INTERNATIONAL FINANCE. Suppose you wish to invest $50,000 today in German securities earning 5% per year. What is your investment value 3 years from today - in U.S. dollars - if, if at that time the direct quote for the euro is $1.35? Assume the current spot exchange rate is $1.30.

B) $44,524.04

C) $52,500.00

D) $60,107.45

E) None of the above

30) Based on the published data, one can determine that the SUM of the company's net operating profit after taxes (NOPAT) and depreciation charges for the period is called:

B) Operating cash flow, and is equal to $12.11 billion

C) Free cash flow, and is equal to $8.57 billion

D) Operating cash flow, and is equal to $8.68 billion

E) Not enough information to determine

1) In Finance, which of the following is NOT considered the GOAL of the firm?

A. Maximization of earnings per share

B. Maximization of stock price

C. Maximization of stockholder wealth

D. Maximization of the value of the firm

E. All of the above are correct

F. None of the above is correct

Explanation / Answer

27) Amount to be invested today in Euro = $50000 / $1.30 = Euro 38461.54

Value in 3 years = Euro 38461.54 (1+.05)^3

= Euro 44524.04

Vakue of Euro 44524.04 in $ = 44524.04 * $1.35 = $60104.45

D option is correct

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