Valuation of an MNC Birm Co., based in Alabama, is considering several international opportunities in...
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Valuation of an MNC Birm Co based in Alabama, is considering several international opportunities in Europe that could affect the firm's value. Its valuation depends on four factors: expected cash flows in dollars, expected cash flows in euros that are ultimately converted into dollars, the rate at which it can convert euros to dollars, and Birm's weighted average cost of capital. For each of the following opportunities,Advanced Questionsa Birm plans a licensing deal in which it will sell technology to a firm in Germany for $ million; the payment is invoiced in dollars, and this project has the same risk level as its existing businesses. bBirm plans to acquire a large firm in Portugal that is riskier than its existing businesses.Birm plans to discontinue its relationship with a US supplier so that it can import a small amount of supplies denominated in euros at a lower cost from a Belgian supplier.Birm plans to export a small amount of materials to Ireland that are denominated in euros.
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