Answer The followng questions.
a) Analyse four components of the financial account as used in the balance of payments of a country. b) Summarise five assumptions of the theory of comparative advantage as postulated by David Ricardo (1817). c) In an effort to integrate the world trade, a great milestone has been achieved towards globalization of the world economy. World's businesses are turning to foreign sales and cross-border partnerships as paths towards expansion and consolidation. In relation to the above statement, discuss four events and trends that could have contributed to the reduced restrictions and increased international trade. d) Explain three sources of short term borrowing that could be used by a multinational corporation to finance its operations.b) Finix Ventures Limited (FVL) intends to make a $100 million payment in three months' time. The money is available now. You work as an investment and financial advisor for the company and you are provided with the following information: . United States dollar ($) deposit interest rate is 8% per annum. Sterling pounds (E) deposit interest rate is 10% per annum. Spot exchange rate is $1.40/f. . Three month forward rate is $1.38f. Required: i. Using suitable computations, advise FVL on the best strategy to invest the $100 million. ii. Determine the forward rate that would yield an equilibrium situation assuming that the interest rates and the spot exchange rate remain the same in both countries Using suitable computations, advise the company on the best way of investing the $100 million assuming the Sterling pound deposit interest rate was 16% per annum. Assume. ...... that the US dollar interest rate, the spot rate and forward rate remain the same iv. Determine the equilibrium Sterling Pound (E) deposit interest rate assuming that the stated spot rate, the forward rate and the dollar deposit interest rate remain the same.Triux Led is a manufacturing company located in industrial area. Although the company's performance in the past five years has been impressive there has been a high turn over in the management staff which most of them being recruited by other companies within the industry. In order to reduce the high turnover of the management Staff, the company's managing director, Mr. Sam Njau, is considering implementing a bonus scheme to motivate the employees. He recently hired a consultant to assist him in establishing an appropriate bonus scheme. The consultant's report contained the following recommendations: The company should transfer 15 per cent of the profits each year to the bonus scheme. Bonus to the management staff is allocated on the basis of the individual's performance. The need for a formal performance appraisal of the management staff for the bonus scher to be objective and successful. Mr. Sam Njau strongly disagreed with the recommendation of instituting a formal performance appraisal in the company. His argument was that during the last formal performance appraisal in the company two years ago, all the employees were appraised as being either outstanding or excellent which was contrary to the feedback obtained by the company's senior managers in their informal performance appraisal.After consultations with the senior management team, he decided to implement a bonus scheme on the basis of (he employees' current basic pay and position in the company. Required: a) Discuss the effect of implementing the bonus scheme in the company. b) Explain to Mr. Sam Njau the benefits that will accrue to the company as a result of a formal performance appraisal, c) Identify the reasons that may have led to the differences between the formal performance appraisal and the senior managers' informal performance appraisal
