1. OneUSF, a U.S. MNC based in Florida, plans to build a wholly owned manufacturing facility in Italy. The firms existing operation has already accumulated a net amount of 800,000, which can be used to partially finance the construction cost. Current exchange rate is $1.32/1.00. The long-run U.S. inflation rate per annum is 3 percent. The long-run Eurozone inflation rate per annum is 2.1 percent. The marginal corporate tax rate in Italy and the U.S. is 35%. The accumulated restricted funds were earned under special tax concessions offered during the initial years of the sales operation, and taxed at a marginal rate of 20 percent. If they were repatriated, additional tax at the 35 percent marginal rate would be due, but with the foreign tax credit given for the Italian taxes already paid. What is the present value of the accumulated restricted funds? (Please keep 2 digits in decimals to get the right answer)

Group of answer choices

$198,000

$196,270

$150,000

None of the above within $100 of the correct answer.

$199,500

2. OneUSF, a U.S. MNC based in Florida, plans to build a wholly owned manufacturing facility in Italy. The cost of constructing the manufacturing plant is estimated at 3,000,000. The Italian government will allow the plant to be depreciated straight-line over a 3-year period. The normal borrowing rate for OneUSF is 8 percent in dollars and 7 percent in euros. In dollar terms, OneUSF uses 12 percent all-equity cost of capital. Current exchange rate is $1.14/1.00. The long-run U.S. inflation rate per annum is 2.8 percent. The long-run Eurozone inflation rate per annum is 2.1 percent. The marginal corporate tax rate in Italy and the U.S. is 35%. What is the present value of the depreciation tax shield? (Please keep 2 digits in decimals to get the right answer)

Group of answer choices

None of the above is within $10,000 of the correct answer

$1,065,058

$1,045,839

$974,510

$1,010,684

3. OneUSF, a U.S. MNC based in Florida, is considering making a fixed direct investment in Italy. The Italian government has offered OneUSF a concessionary loan of 2,700,000 at a rate of 3 percent per annum. The current spot rate is $1.36/1.00 and the expected inflation rate is 4% in the U.S. and 2% in Italy. The normal borrowing rate is 7 percent in dollars and 6 percent in euros. The loan schedule calls for the principal to be repaid in three equal annual installments. The marginal corporate tax rate in Italy and the U.S. is 35%. What is the present value of the benefit of the concessionary loan? (Please keep 2 digits in decimals to get the right answer)

Group of answer choices

None of the above with the $10,000 of the correct answer

$1,310,116

$51,360

$1,165,209

$117,160