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(a) Explain the following methods of payment that could be used by a multinational corporation (MNC) to settle international transactions: Required: (i) Prepayment. (2

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(a) Explain the following methods of payment that could be used by a multinational corporation (MNC) to settle international transactions: Required: (i) Prepayment. (2 marks) (ii) Letters of credit (L/Cs). (2 marks) (iii) Drafts. (2 marks) (iv) Open account. (2 marks) .(b) Suggest three measures that a multinational corporation could take to address the issue of nepotism and corruption in the host country. (3 marks) (c) Evaluate three factors that influence capital structure decisions for multinational corporations (MNCs). (3 marks) (d) Tamco Limited, a Kenyan based company, is considering investing in a new project to be based either in Rwanda. The project will constitute 30% of the total funds to be invested by the company. neenya or Characteristics of proposed projects Existing If located If located Business in Kenya in Rwanda Mean expected annual return on investments (ROI) 20% 25% 25% Standard deviation of expected annual after-tax ROI 0.10 0.09 0.11 Correlation of expected annual after-tax ROI for similar business in Kenya 0.80 0.02 Required: (i) The overall expected after-tax returns assuming that the new project is located in Kenya. (2 marks) (ii) The overall variance in returns assuming Tamco Limited decides to locate the new project in Kenya. (2 marks) (iii) The overall variability of the company's return assuming the project is located in Rwanda. (2 marks)

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a i Prepayment An advance payment method wherein the buyer transfers the full payment before receiving the goods or services This reduces credit risk and expedites transactions but increases working c... blur-text-image

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