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How does foreign investment help the U.S. government?

Short Answer

Expert verified

Foreign investment helps the U.S. in strengthening their economy.

Step by step solution

01

Foreign Investment

Foreign investment is the process of investing in domestic companies by an investor who belongs to another country. Depending on certain circumstances, such an investor can be an individual or institution.

02

Importance of foreign investment

The foreign investment helps the U.S. government in the following manner:

  • Foreign investment brings in opportunities for employment because a company receiving investment expands its operations.
  • Foreign investment also facilitates the U.S. government to strengthen its economy.

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Most popular questions from this chapter

Question: The Bowman Corporation has a \(18 million bond obligation outstanding, which it is considering refunding. Though the bonds were initially issued at 10 percent, the interest rates on similar issues have declined to 8.5 percent. The bonds were originally issued for 20 years and have 10 years remaining. The new issue would be for 10 years. There is a 9 percent call premium on the old issue. The underwriting cost on the new \)18,000,000 issue is \(530,000, and the underwriting cost on the old issue was \)380,000. The company is in a 35 percent tax bracket, and it will use an 8 percent discount rate (rounded after-tax cost of debt) to analyze the refunding decision.

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Question: The Bowman Corporation has a \(18 million bond obligation outstanding, which it is considering refunding. Though the bonds were initially issued at 10 percent, the interest rates on similar issues have declined to 8.5 percent. The bonds were originally issued for 20 years and have 10 years remaining. The new issue would be for 10 years. There is a 9 percent call premium on the old issue. The underwriting cost on the new \)18,000,000 issue is \(530,000, and the underwriting cost on the old issue was \)380,000. The company is in a 35 percent tax bracket, and it will use an 8 percent discount rate (rounded after-tax cost of debt) to analyze the refunding decision.

b. Calculate the present value of total inflows.

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