Question
Americo Industries' Consolidate Earnings. Americo is a U.S.-based multinational manufacturing firm with wholly-owned subsidiaries in Brazil, Germany, and China, in addition to domestic operations in
Americo Industries' Consolidate Earnings. Americo is a U.S.-based multinational manufacturing firm with wholly-owned subsidiaries in Brazil, Germany, and China, in addition to domestic operations in the United States. Americo is traded on the NASDAQ. Americo currently has 653,000 shares outstanding. The basic operating characteristics of the various business units are as follows:(Click on the icon to import the table into a spreadsheet.)
Business Performance (000s) | U.S. Parent (US$) | Brazilian Subsidiary (R$) | German Subsidiary (€) | Chinese Subsidiary (¥) |
Earnings before taxes (EBT) | $5,280 | R $6,220 | € 4,770 | ¥ 2,470 |
Corporate income tax rate | 35% | 25% | 40% | 30% |
Average exchange rate for the period | R$ 1.8653/$ | € 0.6715/$ | ¥ 7.6775/$
|
Americo must pay corporate income tax in each country in which it currently has operations.
a. After deducting taxes in each country, what are Americo's consolidated earnings and consolidated earnings per share in U.S. dollars?
Calculate the business performance per country below:(Round to two decimal places. Round exchange rates to four decimal places.)
U.S. Parent | ||
Business Performance (000s) |
| Company |
Earnings before taxes (local currency) | $ |
|
Less corporate income taxes | $ |
|
Net profits of individual subsidiary | $ |
|
|
| |
Avg exchange rate for the period (fc/$) |
|
|
Net profits of individual subsidiary | $ |
|
b. What proportion of Americo's consolidated earnings arise from each individual country?
c. What proportion of Americo's consolidated earnings arise from outside the United States?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started