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MNC: Motorcycle Protective Gear

Country: Vietnam

Resources

Read/review the following resources for this activity:

• Lecture
• Minimum of 3 resources required

Introduction

Continuing your creation of a MNC, consider the decisions that you made in previous weeks and add to your company using the prompts below.

Activity Instructions

Provide answers to the following MNC components using both information and concepts from the text as well as outside research to support your statements and probable MNC success. You might organize your paper using the headings and statements below to make sure you include all of the appropriate information.

Deriving a Required Rate of Return for an International Project

• Consider a possible project that would result in expansion of your international business.
• Describe how you would derive a required rate of return for this project.

Estimating Cash Flows of an International Project

• If you seriously considered whether to implement your international business idea, you would have to measure the costs and benefits of this idea. Describe how you would estimate the dollar revenue to be received from your business.
• Describe how you would estimate the expenses associated with your business.
• Describe how you would estimate the net cash flows (in dollars) of your business.
• Explain why your estimate of the net cash flows (in dollars) could be overestimated.

Writing Requirements (APA format)

• 4-6 pages (approx. 300 words per page), not including title page or references page
• 1-inch margins
• Double spaced
• 12-point Times New Roman font
• Title page with topic and name of student
• References page (minimum of 3 resources)

Week 4 Lecture

FIN616 International Financial Management

Lecture

Introduction

When financial managers of domestic firms complete capital budgeting analysis they must consider major objectives such as sales forecasts, cost forecasts, discount rate calculations (including added risk and required rate of return), etc. International financial managers within MNCs must consider not only all of these factors, but also tax differentials, exchange rate fluctuations, inflation, financing arrangements, uncertain sales and salvage value forecasts, etc. During this week we will expand upon the capital budgeting process learned in corporate finance and add international elements and considerations.

One of the basic fundamentals of corporate finance is that the main goal of financial managers is to maximize shareholder wealth. One way in which a corporation can ensure that shareholder wealth is maximized (rather than the maximization of current profits to increase the salary of top managers) is to have a strong corporate governance policy enacted. We will discuss ways in which MNCs can incorporate a strong corporate governance policy in all subsidiaries to ensure corporate wide maximization of shareholder wealth.

Last modified: Thursday, 7 August 2014, 10:27 AM