NexusTech's Earnings and the Fall of the Dollar. NexusTech 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. Nexus Tech is traded on the NASDAQ. Nexus Tech currently has 657,000 shares outstanding. The basic operating characteristics of the various business units is as follows: 5. Nexus Tech must pay corporate income tax in each country in which it currently has operations. a. After deducting taxes in each country, what are Nexus Tech's consolidated earnings and consolidated earnings per share in U.S. dollars? The dollar has experienced significant swings in value against most of the world's currencies in recent years. b. What would be the impact on Nexus Tech's consolidated EPS if all foreign currencies were to appreciate 21% against the U.S. dollar? c. What would be the impact on Nexus Tech's consolidated EPS if all foreign currencies were to depreciate 21% against the U.S. dollar? Business Performance (000s) Earnings before taxes (EBT) Corporate income tax rate Average exchange rate for the period U.S. Parent (USS) $4,440 21% Brazilian Subsidiary (reais, R$) R$6,180 25% R$1.8219 = $1.00 German Subsidiary (euro, ) 4,530 40% 0.7026 = $1.00 Chinese Subsidiary (yuan, Y) 2,430 30% 7.7306 = $1.00 = Calculate the business performance per country below: (Round to two decimal places. Round exchange rates to four decimal places.) U.S. Parent Brazilian German Chinese Business Performance (000s) Company Subsidiary Subsidiary Subsidiary $ R$ Earnings before taxes (local currency) Less corporate income taxes Net profits of individual subsidiary $ R$ $ R$ Avg exchange rate for the period (fc/$) Net profits of individual subsidiary $ $ The consolidated earnings per share is $ (Round to the nearest cent.) Calculate the business performance per country below: (Round to two decimal places. Round exchange rates to four decimal places.) U.S. Parent Brazilian German Chinese Business Performance (000s) Company Subsidiary Subsidiary Subsidiary Earnings before taxes (local currency) $ R$ Less corporate income taxes $ R$ Net profits of individual subsidiary $ R$ Avg exchange rate for the period (fc/$) Net profits of individual subsidiary $ $ $ The consolidated earnings per share is $. (Round to the nearest cent.) The EPS change from baseline is %. (Round to one decimal place.) Calculate the business performance per country below: (Round to two decimal places. Round exchange rates to four decimal places.) U.S. Parent Brazilian German Chinese Company Subsidiary Subsidiary Subsidiary $ R$ \ Business Performance (000s) Earnings before taxes (local currency) Less corporate income taxes Net profits of individual subsidiary $ R$ $ R$ Avg exchange rate for the period (fc/$) Net profits of individual subsidiary $ $ The consolidated earnings per share is $ (Round to the nearest cent.) The EPS change from baseline is %. (Round to one decimal place.) NexusTech's Earnings and the Fall of the Dollar. NexusTech 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. Nexus Tech is traded on the NASDAQ. Nexus Tech currently has 657,000 shares outstanding. The basic operating characteristics of the various business units is as follows: 5. Nexus Tech must pay corporate income tax in each country in which it currently has operations. a. After deducting taxes in each country, what are Nexus Tech's consolidated earnings and consolidated earnings per share in U.S. dollars? The dollar has experienced significant swings in value against most of the world's currencies in recent years. b. What would be the impact on Nexus Tech's consolidated EPS if all foreign currencies were to appreciate 21% against the U.S. dollar? c. What would be the impact on Nexus Tech's consolidated EPS if all foreign currencies were to depreciate 21% against the U.S. dollar? Business Performance (000s) Earnings before taxes (EBT) Corporate income tax rate Average exchange rate for the period U.S. Parent (USS) $4,440 21% Brazilian Subsidiary (reais, R$) R$6,180 25% R$1.8219 = $1.00 German Subsidiary (euro, ) 4,530 40% 0.7026 = $1.00 Chinese Subsidiary (yuan, Y) 2,430 30% 7.7306 = $1.00 = Calculate the business performance per country below: (Round to two decimal places. Round exchange rates to four decimal places.) U.S. Parent Brazilian German Chinese Business Performance (000s) Company Subsidiary Subsidiary Subsidiary $ R$ Earnings before taxes (local currency) Less corporate income taxes Net profits of individual subsidiary $ R$ $ R$ Avg exchange rate for the period (fc/$) Net profits of individual subsidiary $ $ The consolidated earnings per share is $ (Round to the nearest cent.) Calculate the business performance per country below: (Round to two decimal places. Round exchange rates to four decimal places.) U.S. Parent Brazilian German Chinese Business Performance (000s) Company Subsidiary Subsidiary Subsidiary Earnings before taxes (local currency) $ R$ Less corporate income taxes $ R$ Net profits of individual subsidiary $ R$ Avg exchange rate for the period (fc/$) Net profits of individual subsidiary $ $ $ The consolidated earnings per share is $. (Round to the nearest cent.) The EPS change from baseline is %. (Round to one decimal place.) Calculate the business performance per country below: (Round to two decimal places. Round exchange rates to four decimal places.) U.S. Parent Brazilian German Chinese Company Subsidiary Subsidiary Subsidiary $ R$ \ Business Performance (000s) Earnings before taxes (local currency) Less corporate income taxes Net profits of individual subsidiary $ R$ $ R$ Avg exchange rate for the period (fc/$) Net profits of individual subsidiary $ $ The consolidated earnings per share is $ (Round to the nearest cent.) The EPS change from baseline is %. (Round to one decimal place.)
