I.

1. C
2. A
3. C 16.33
4. C 0.7625
5. C

II. Americo’s EPS Sensitivity to Exchange Rates (B)

Assume a major political crisis wracks Brazil, first affecting the value of the Brazilian reais and, sub
country. What would be the impact on Americo’s consolidated EPS if, in addition to the fall in the v
fell as a result of the recession to R$5,8000,000?

U.S. parent
Business Performance (000s, local
Company
currency)
(US$)

EBT 4,500
C.I.T. 35% -1575
N.P of I.S. 2,925
Avg Exchange -
N.P. of I.S. (USD) 2,925

Consolitated Profit 9,602.22

Shares Outstanding 650.000

Consolitated (EPS) 14.77

U.S. parent
Business Performance (000s, local
Company
currency)
(US$)

EBT 4,500
C.I.T. 35% -1575
N.P of I.S. 2,925
Avg Exchange -
N.P. of I.S. (USD) 2,925

Consolitated Profit 8,448.06

Shares Outstanding 650

Consolitated (EPS) 13.00

EPS Change from Baseline -12.0%

III

Santiago Pirolta has accepted the Managing Director position for Vitro de Mexico's U.S. operations.
based on a variety of bottle products, both mass market (e.g., glass bottles for soft drinks and beer) a
Santiago will live and work in the United States (Dallas, Texas) and wishes to be paid in U.S. dollars
to tie his annual performance bonus to the Mexican peso value of U.S. sales since Vitro consolidates

Santiago, however, is a bit uncertain on having his bonus based on the Mexican peso values of U.
completion of the table below?
Vitro's U.S. Sales Percent
Year (millions of USD) Change
2011 USD 820
2012 USD 842 2.7%
2013 USD 845 0.4%
2014 USD 860 1.8%
La recomendación es que Santiago se mantenga firme en seguir obteniendo la bonificación en el valo
se daba en ambas divisas, la volatilidad fue mayor en MXN que en USD
 FF
0.7628

change Rates (B)

of the Brazilian reais and, subsequently, inducing an economic recession within the
in addition to the fall in the value of the reais to R$3.00/$, earnings before taxes in Brazil

German
Brazilian Subsidary
Subsidiary
(reais, R$)
(euros, €)

6,250 4,500
25% -1562.5 40% -1800 30%
4,688 2,700
1.8000 0.7018
2,604.17 3,847.25

German
Brazilian Subsidary
Subsidiary
(reais, R$)
(euros, €)

5,800 4,500
25% -1450 40% -1800 30%
 4,350 2,700
3.0000 0.7018
1,450.00 3,847.25

de Mexico's U.S. operations. Vitro is a Mexico-based manufacturer of flat and custom glass products. Much o
les for soft drinks and beer) as well as specialty products (high-end cosmetic bottles with rare metal coloring a
shes to be paid in U.S. dollars. Vitro has agreed that his base salary of USD350,000 will be paid in U.S. dollar
sales since Vitro consolidates all final results for reporting to stockholders in Mexican pesos (MXN).

he Mexican peso values of U.S. sales. As a close friend and colleague, what advice would you give him based

Annual Avg Rate Vitro's U.S. Sales Percent

MXN = 1 USD (millions of MXN) Change
MXN 12.80 MXN 10,496
MXN 13.30 MXN 11,199 6.7%
MXN 12.70 MXN 10,732 -4.2%
MXN 13.40 MXN 11,524 7.4%
endo la bonificación en el valor estadounidense en vez del peso mexicano ya que aunque, bajo la dirección ant
D
Chinese
subsidiary
(yuan, ¥) Teniendo en cuenta la situación planteada, Americo presentaria u
negativa de 1,78 en las ganancias consolidadas por acción, ya que
2,500 14,77 a 13,00 con la caida de los reales brasileños y la caida de la u
-750 de impuesto.
1,750 Y teniendo en cuenta esta variación, los beneficios totales que se o
disminuyen en -12,00%, ya que se obtenian 9602,22 y con la recesi
7.7500
ganan 8448,06 USD
225.81

Chinese
subsidiary
(yuan, ¥)

2,500
-750
 1,750
7.7500
225.81

ustom glass products. Much of its U.S. sales are

les with rare metal coloring and quality).
00 will be paid in U.S. dollars, but Vitro wishes
xican pesos (MXN).

ce would you give him based on your

aunque, bajo la dirección anterior la volatilidad

 , Americo presentaria una variación
adas por acción, ya que pasa de
sileños y la caida de la utilidad antes

neficios totales que se obtenian

n 9602,22 y con la recesión politica se