Assignment List: FIN630-0803A-05 : Global Financial Management
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Assignment List
Unit 1 – International Financial Markets
Reading Assignment:
Business Finance for the Multinational Corporation, Unit 1 (Chapters 1-3)
Download and print the course materials for unit 1.
Assignment Type: Individual Project Deliverable Length: 3-5 pages
Points Possible: 100 Due Date: 6/15/2008 11:59:59 PM CT
As part of its international expansion program, Acme, a U.S. multinational enterprise (MNE), is currently in the planning stages of establishing a Greenfield (see text glossary for definition) production facility overseas. You have been asked to present a proposal to the steering committee comparing the advantages and disadvantages of starting operations in one of two selected foreign countries.
The steering committee has determined that one alternative must be a member of the European Union (EU) while the other cannot be a member of the EU. Subject to these conditions, you may choose any two foreign countries, except China, Czech Republic, and Romania for comparison.
Deliverable: There are many factors to consider in your comparative analysis. Please be sure to include, among other topics, a discussion of the different countries’ currencies, trade policies and cultural variables that may affect operations and profitability in each country. Your report should conclude with a recommendation and supporting rationale as to which country should be selected for the new facility.
Please submit your assignment.
Assignment Type: Discussion Board Deliverable Length: 3-4 paragraphs
Points Possible: 50 Due Date: 6/15/2008 11:59:59 PM CT
Acme, a United States firm, has been in acquisition talks with two different European firms. JEL Industries is headquartered in a country that is part of the European Union (EU), and uses the Euro, while DBC Industries is headquartered in a European country that does not belong to the Union and does not use the Euro as their primary currency.
Based only on the knowledge of whether or not the firm is located in a country within or outside of the European Union, recommend one of the organizations and explain why you selected that organization. In your response be sure to describe the implications of running a business in a country that is within or outside of the European Union.
Describe the advantages and disadvantages of the choice you made.
In your own words, please post a response to the Discussion Board and comment on other postings. You will be graded on the quality of your postings.
Unit 2 – Foreign Investment Decisions Part 1
Reading Assignment:
Business Finance for the Multinational Corporation, Unit 2 (Chapters 4 & 5)
Download and print the course materials for unit 2.
Assignment Type: Individual Project Deliverable Length: Excel spreadsheet
Points Possible: 100 Due Date: 6/22/2008 11:59:59 PM CT
The Acme Company has its European subsidiary based in the Euro zone. The subsidiary must solve a series of five problems that require you to apply the concept of “time value of money,” or TVM. The five problems are listed below. Solving them will require the use of Microsoft Excel. Before you begin your work, each student is to select a unique nine-digit random number that contains no zeros, no “patterns,” and should use most of the digits between one and nine. This value will be referred to as the student unique number (SUN). Further, digits within the SUN are read from left to right. For example, if the SUN = 123456789, the first digit = 1, the second digit = 2, etc. Please note that the interest rate used in all questions represents an annual rate and all Euro figures are in whole Euros (not Euros and cents).
1. Acme plans to construct a new manufacturing facility in 14 years. If Acme estimates that today’s cost of the new plant is SUN Euros (use all 9 digits) and annual inflation is A% (A = the first digit of SUN), how much will the manufacturing plant cost in 14 years?
2. Acme has decided to establish a sinking fund for its outstanding preferred stock issue. SUN (use all 9 digits) represents the amount of the issue that will be retired in 26 years. At the beginning of each of these 26 years, Acme will deposit an equal amount into an account that earns B% (B = the second digit of SUN). What is the value of this periodic deposit?
3. One of Acme’s new projects will generate the following cash flows at the end of each of the stated years: year 2 = SUN digits 1-3; year 4 = SUN digits 4-6; year 7 = SUN digits 7-9. If these cash flows are discounted at 12%, what is the sum of their present values?
4. Acme is assessing its employee pension fund. At the end of each of the next 25 years Acme will have to pay its retirees (use the first 4 digits of your SUN). If the fund is estimated to earn D% (D = the fourth digit of SUN), how much does Acme need to have set aside today to ensure that it can meet its future obligations? (At the end of the 25th year, the balance should be drawn down to zero.)
5. As part of a new labor contract, Acme has agreed to make a one-time contribution of Euros 1,000,000 to the construction of a new physical fitness facility for its employees. This amount will be placed in an account earning E% (E = the fifth digit of SUN). When the account grows to Euros 1,850,000, construction will commence. How long must employees wait until construction of their new gym begins? (Your answer should be accurate to two decimal places, e.g., 1.57 years).
Prepare for Acme’s CFO an analysis that contains solutions for all five problems. Be sure to clearly present and label all values and variables, provide Excel TVM formulas, and conclude each question with a brief interpretation of your results. Your entire submission must be contained within an Excel document. (Note: You must use Excel TVM functions to complete this assignment; using a hand calculator or website and plugging values into a template is not acceptable.) Note: The books of the subsidiary being held in Euros, the exchange rate Euro/US dollars has no influence on the result of the exercise.
Please submit your assignment.
Assignment Type: Discussion Board Deliverable Length: 6-8 paragraphs
Points Possible: 75 Due Date: 6/22/2008 11:59:59 PM CT
Q1) Major multinational organizations such as Acme (some of which are listed below) attempt to track the relative movements and magnitudes of global capital investment. Using these web pages and others you may find, prepare a 5-6 paragraph executive briefing on the question of whether capital generated in the industrialized countries is finding its way to the less-developed and emerging markets.
Q2) Is there some critical distinction between “less developed” and “emerging”? (Please provide a definitive response in 1-2 paragraphs.)
The Old World Bank
OECD
European Bank for Reconstruction
In your own words, please post a response to the Discussion Board and comment on other postings. You will be graded on the quality of your postings.
Credit:ivythesis.typepad.com
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