$*$ a$.$In the context of $$Vision $2028,$ the new management is considering building a new factory in South Korea. The Korean subsidiary will require an initial investment of $200,000$m South Korean Won $($KRW$).$ Jasmine can borrow money to finance this investment in the UK market, in France, or in South Korea. Appendix Q$3$ offers information about the borrowing costs in different currencies and an estimation of the future value of FX$.$ Advise which is the best way to finance the Korean factory.

$*$ b$.$Mr$.$ Jordan considers moving the Chinese factory to South Korea. Assess the risk exposure related to this relocation of production.

$*$ c$.$The research department of a large financial institution provided inflation expectations for the next five years. According to the forecasts, UK will have $1\mathrm{.}75\%$ more inflation than France and $3\mathrm{.}5\%$ higher inflation than South Korea. On the basis of this new evidence, would you reconsider your proposal with regard to financing the Korean factory? Explain your answer.

Initial investment $($KRW$)200,000$

Interest rate in UK $(5-$year loan$)0\mathrm{.}09$

Interest rate in South Korea $(5-$year loan$)0\mathrm{.}15$

Interest rate in France $(5-$year loan$)0\mathrm{.}12$

Spot exchange rate: KRW per GBP$2,000\mathrm{.}00$

Expected appreciation of GBP in relation to KRW$4\%$ per annum

Spot exchange rate: EUR per GBP$1\mathrm{.}18$

Expected appreciation of GBP in relation to EUR$3\%$ per annum

Jasmine has well established export markets but if the Board approves Vision $2028,$ it will begin to enter new markets abroad.

$*$ d$.$If Jasmine wants to borrow long$-$term funds to support its new foreign operations, what options does it have available to it$?$

$*$ e$.$What finance methods might Jasmine adopt to satisfy itself that it will be paid for shipping goods to new importers?