FN7226 Managing Resources in the International Business Environment Presentation

You are International Business Manager at a UK based company. Your company has identified USA and Europe as potential markets and wish to expand asap and plans a full-scale expansion. You are requested to analyse both projects and advise. 

In considering such large project, you must work out the risk of each project, cost of capital and NPV. Allocate discount rate for each project according to current international business climate and justify why you allocated the discount rate for each region. Discuss how you aim to manage international risks.

Projected cash flows in respective currencies:

Instructions:

1. Briefly discuss the viability of both projects in today’s global business context. Based on your discussion, allocate and justify the discount rate for both projects.
2. How much investment (GBP) is needed for each project and what is the NPV of each project? Use spot and forward exchange rates to discuss.
3. Considering the current world economic climate, the future exchange rates are uncertain.  How would you analyse/anticipate the change in exchange rates? Write a brief proposal to mitigate impact of possible exchange rate fluctuations
4. Discuss your calculations and advise which project should be selected.

General Presentation

• The report must be word processed, double spaced with 25mm margins. The font size must be such that the project is easily readable e.g. a font size of either 12 or 14 point (excluding headings). Use widely-used fonts such as Times New Roman, not those that might be considered informal or unusual. Pages must be sequentially numbered.
• Chapters, sections and sub-sections must be clearly identified and sequentially numbered or lettered, with separate chapters beginning on a new page.
• Diagrams, graphs, figures, tables, pictures and charts must be incorporated into the report and they should be clearly labelled and referenced.
• References must be accurately provided in the text using the Harvard System (see Saunders et al., 2009).  All quotations must be acknowledged and correctly presented within the text i.e. other than very short ones, quotations should be indented and in single spacing. (See Saunders et al for further details). 
• Number of words should be mentioned at the end and before any bibliography.