International Financial Management - Assignment Question Essay - 1

International Financial Management - Assignment Question - Essay Example from each one party in the venture is given roles and liabilities upon the occurrence of the foreseen risk (Kumar 2007).Bento, J. P. C., 2009. Economic integration, international trade and the role of foreign direct investment the subject field of Lusitanian manufacturing. Berlin Distributed in North America by Transaction Publishers.A rein-voicing center is a department or a subsidiary of a multinational friendship where all transactions happening inside the house are centralized and foreign currency liabilities and receivables are netted (Kumar 2007).A merger is a item where two or more firms come together to form one expanded business. On the other hand, an acquisition is a situation where one firm takes over business operations of another firm and becomes the new owner (Kumar 2007).Bento, J. P. C., 2009. Economic integration, international trade and the role of foreign direct investment the case of P ortuguese manufacturing. Berlin Distributed in North America by Transaction Publishers.The first advantage of mergers and acquisitions is that it helps a friendship to expand its market. They also help a company to enjoy the economies of scale and have increased efficiency in their operations (Kumar 2007). Mergers and acquisitions also help a company to reduce on tax and profound implications. A situation where a firm with a high profitability takes over a company with low profitability helps it to reduce the tax liability. In addition to this, a company gains high competitiveness, expands its industry know how and positioning and increases profitability (Kumar 2007).Mergers and acquisitions also have some disadvantages. They suffer from such things like diminish corporate performance and services, lowered industry innovation, decline in equity pricing, decline in investment value, increase in costs to consumers and they suppress competing businesses (Reuvid and private eye 201 1). Expanding to new