20XX年公司财务管理与财务知识分析（英文版）.pptVIP

Multinational vs. domestic financial management Exchange rates and trading in foreign exchange International monetary system International money and capital markets;;1. To seek new markets. 2. To seek raw materials. 3. To seek new technology. 4. To seek production efficiency. 5. To avoid political and regulatory hurdles. 6. To diversify.;1. Different currency denominations. 2. Economic and legal ramifications. 3. Language differences. 4. Cultural differences. 5. Role of governments. 6. Political risk.;;The number of units of foreign currency needed to purchase one U. S. dollar, or the reciprocal of a direct quotation.;;The exchange rate between any two currencies. Cross rates are actually calculated on the basis of various currencies relative to the U. S. dollar.;Cross rate = x = 111.11 x 0.650 = 72.22 yen/A. dollar. Cross rate = x = 1.5385 x 0.009 = 0.0138 A. dollars/yen.;The two cross rates are reciprocals of one another. They can be calculated by dividing either the direct or indirect quotations.; Price = (1.75)(1.50)(111.11) = 291.66 yen.;250 yen = 250(0.0138) = 3.45 A. dollars. 6 – 3.45 = 2.55 Australian dollar profit. 1.5385 A. dollars = 1 U. S. dollar. Dollar profit = 2.55/1.5385 = $1.66.;The risk that the value of a cash flow in one currency translated to another currency will decline due to a change in exchange rates. For example, in the last slide, a weakening Australian dollar (strengthening dollar) would lower the dollar profit.;The current system is a floating rate system. Prior to 1971, a fixed exchange rate system was in effect. The U.S. dollar was tied to gold. Other currencies were tied to the dollar.;;;A currency is convertible when the issuing country promises to redeem the currency at current market rates. Convertible currencies are traded in world currency markets.;It becomes very difficult for multi-national companies to conduct business because there is no easy way to t