Global 2

Business newspapers and magazines, such as the Financial Times, The Wall Street Journal, Bloomberg Businesseek, and The Economist, include various statements made by economic analysts and business gurus. At the end of each chapter, you will be given the opportunity to explain a global news item as it relates to that chapter. How can the following examples of financial news related to the concepts in each of the identified chapters be interpreted? Clearly identify which question you are answering and submit your response in a single Word document.

Chapter 12

For many countries, international tourism is big business. As globalization continues, total tourism dollars in the worlds economy will significantly increase and both large and small nations will benefit from increased expenditures by visitors. Specific industries, such as lodging, airlines, restaurants, souvenir shops, and international attractions, including museums, art galleries, theme parks, wildlife preserves, and musical and concert venues, will strive to gain larger shares of tourist expenditures. In 2013, worldwide tourism receipts reached $1.16 trillion. The United States led the world with $140 billion in international tourism revenues, followed by Spain ($60 billion), France ($56 billion), China ($52 billion), Macau ($52 billion), Italy ($44 billion), Thailand ($42 billion), Germany ($41 billion), United Kingdom ($41 billion), and Hong Kong ($39 billion). France drew the most visitors (85 million), with the United States (70 million), Spain (61 million), China (56 million), and Italy (48 million) rounding out the top five. Turkey, Germany, United Kingdom, Russia, and Thailand completed the top ten. Some international travelers will spend more than others when visiting other countries and are, therefore, prime targets for countries marketing programs. For example, the aver- age expenditure in 2013 for visitors to the United States was $2,590, but visitors from Brazil, China, India, Australia, and Argentina were well above $5,000 per visit. Reasons why people visit foreign countries can help marketers to target their promotional efforts. These include leisure, recreation and holidays, visiting friends or relatives, business, studying or teaching, attending conventions or conferences, and religious and pilgrimage reasons. Galeries Lafayette, the large French department store headquartered in Paris, makes a concerted effort to get tourists to shop in the Paris store. Literature about the store is avail- able through foreign travel agents and on flights into Paris. Brochures, which offer a 15 percent discount, are located in hotel lobbies. Executives estimate that tourists represent 10 percent to 15 percent of its revenues. Source: Travel data found in the 2015 World Almanac.

Do you have an idea as to the percentage of the worlds total expenditures that are spent on tourism?

Why do you think a small destination, Macau, ranks fifth in tourism receipts?

What reasons can you give for visitors to the United States from Brazil, China, Australia, India, and Argentina spending more per visit than travelers from other countries?

Chapter 13

Many businesses around the world have outsourced goods and services to India and China. However, some of these businesses have reversed course and are now insourcing these goods and services. Argue how this course reversal may be justified.

Chapter 14

In 2013 the values of U.S. stocks strongly rose by about 30 percent but other stock markets around the world had little or no growth in valuations. Also, interest rates in international bond markets were at record low levels due to central bank intervention in the United States, Europe, Japan, and elsewhere. How do these market trends affect the cost of capital for international firms? What will be the effect on the NPVs of their investment projects?

Chapter 15

International Financial Reporting Standards (IFRS) are being used in