Business, 15.07.2020 03:01 ari20004

"A U. S.-based company, Global Products Inc., has wholly owned subsidiaries across the world. Global Products Inc. sells products linked to major holidays in each country." The president and board members of Global Products Inc. believe that the managers of their wholly owned country-level subsidiaries are best motivated and rewarded with both annual salaries and annual bonuses. The bonuses are calculated as a predetermined percentage of pretax annual income.

Senora Larza, the president of Global Products of Mexico, has worked hard this year to make her Mexican subsidiary profitable. She is looking forward to receiving her annual bonus, which is calculated as a predetermined percentage of this year’s pretax annual income earned by Global Products of Mexico. A condensed income statement for Global Products of Mexico for the most recent year is as follows (amounts in thousands of pesos):

Sales MXN 20,000
Expenses 19,000
Pretax Income MXN 1,000

The U. S. headquarters financial group translates each of its wholly owned subsidiary’s results into U. S. dollars for evaluation. After translating the Mexican pesos income statement into U. S. dollars, the condensed income statement for Global Products of Mexico is as follows (amounts in thousands of dollars):

Sales US $6,000
Expenses 6,600
Pretax Income US $(600)

Required:
Calculate the bonus amount based on (1) the Mexican pesos-based Pretax Income and (2) the U. S. dollar-based Pretax Income. The predetermined percentage for the calculation of Bonus is 15%.

Answers: 2

Show answers

Another question on Business

Business, 21.06.2019 22:40

wilson's has 10,000 shares of common stock outstanding at a market price of $35 a share. the firm also has a bond issue outstanding with a total face value of $250,000 which is selling for 102 percent of face value. the cost of equity is 11 percent while the preminustax cost of debt is 8 percent. the firm has a beta of 1.1 and a tax rate of 34 percent. what is wilson's weighted average cost of capital?

Answers: 3

Answer

Business, 22.06.2019 06:50

Suppose the marginal damage and marginal benefit curves in a polluted neighborhood are md = p/3 and mb = 4 – p. also, suppose that transactions costs are low, so that the consumers and the firm can bargain. we saw that in this case, the socially-optimal level of pollution is achieved. start by computing the socially-optimal p. then, for each of the following cases, compute the amount of money transferred through the bargaining process, and indicate who pays whom (i.e., whether consumers pay the firm, or vice versa). also, compute the gains to each party relative to the status quo (i.e., the starting point of the bargaining process).a)consumers have the right to clean air; firm is dominant in the bargaining process.b)consumers have the right to clean air; consumers are dominant in the bargaining process.c)firm has the right to pollute; firm is dominant in the bargaining process.d)firm has the right to pollute; consumers are dominant in the bargaining proces

Answers: 1

Answer

Business, 22.06.2019 12:40

Kumar consulting operates several stock investment portfolios that are used by firms for investment of pension plan assets. last year, one portfolio had a realized return of 12.6 percent and a beta coefficient of 1.15. the average t-bond rate was 7 percent and the realized rate of return on the s& p 500 was 12 percent. what was the portfolio's alpha?

Answers: 1

Answer

Business, 22.06.2019 16:30

On april 1, the cash account balance was $46,220. during april, cash receipts totaled $248,600 and the april 30 balance was $56,770. determine the cash payments made during april.

Answers: 1

Answer

You know the right answer?

"A U. S.-based company, Global Products Inc., has wholly owned subsidiaries across the world. Global...

Questions