Analyze the major exchange rate risks

Assignment Help Accounting Basics
Reference no: EM131878803

Assignment 1: MNC Enters China

Select one (1) MNC that does not currently do business in China. Next, consider the steps that the company should consider in determining the feasibility of entering the Chinese market and establishing a market for its products or services there.

In addition to your own research, use the following links to conduct a country risk assessment (CRA) on China:

• Bureau of Economic Analysis

• Transparency International Corruptions Perceptions Index

• Ranking of Economies-World Bank

• IMF Home Page

• Country Risk Classification-OECD

• World Trade Organization Home Page

• "Industry Analysis: Recreation" article

Focus on the following areas: corruption, political stability, exchange rate stability, regulatory oversight, freedom of the press, and rule of law. Research other factors that you believe you should evaluate. Additionally, consider the importance of culture in evaluating risk.

Then, go to the Hofstede Center's Country Comparison cultural tool. Compare China to the U.S. on Hofstede's six (6) key cultural dimensions scale by selecting "United States" from the "Comparison Country" drop-down menu.

Write an eight to ten (8-10) page paper in which you:

1. Summarize the business that you have chosen, and provide a two to three (2-3) paragraph justification as to why China would be a viable market for the selected business.

2. Examine the exchange rate of the U.S. dollar and the Chinese Yuan for the last 24 months. Explain the major overall changes that have occurred and speculate on the key economic variables that most likely have influenced the exchange rate movements. Provide a rationale for your response.

3. Analyze the major exchange rate risks associated with transaction and translation exposure within the Chinese market. Based on what you have gleaned from your analysis, predict the major changes that you believe will occur in the next 24 months. Justify your response.

4. Recommend key steps that the chosen MNC could take in order to mitigate or eliminate exchange rate risk. Suggest one (1) method that the MNC in question could use with derivatives in order to mitigate, or eliminate such risks. Provide a rationale for your response.

5. Recommend one (1) hedging technique geared toward managing the economic, transaction, and translation exposure in the Chinese market. Justify your response.

6. Conduct a country risk assessment to ascertain whether or not management should support the proposal for your chosen MNC to enter into the Chinese market. Based on Geert Hofstede's six (6) dimensions of culture, predict three (3) likely problems posed by the cultural differences between the chosen MNC's culture and the Chinese culture. Provide a rationale for your response.

7. Use at least six (6) quality references, with at least two (2) from peer reviewed journal articles.
Your assignment must follow these formatting requirements:

• Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.

• Include a cover page containing the title of the assignment, the student's name, the professor's name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

Information related to above question is enclosed below:

Attachment:- References.rar

Reference no: EM131878803

Questions Cloud

What is the initial cost of the equipment : The discount rate is 16% and the IRR of the project is 20%. What's the initial cost of the equipment?
Evaluate the importance of mncs : Evaluate the importance of MNCs having a culturally diverse board of directors and work force. Provide one (1) example that depicts the main reasons.
Risk adverse entered into swap agree with speculative bank : Risk Adverse entered into swap agree with Speculative Bank because they wanted fixed rate interest payments to hedge their interest cash flow of debt instrument
Prepare a presentation on professional code of communication : Prepare a PowerPoint presentation that serves as your own professional code of communication.
Analyze the major exchange rate risks : Analyze the major exchange rate risks associated with transaction and translation exposure within the Chinese market. Based on what you have gleaned.
Most they will allow jim to spend on monthly mortgage : Apple bank has a maximum front end DTI limit of 28%, what is the most they will allow Jim to spend on a monthly mortgage?
Argumentative essay on american environmental history : Question: Argumentative essay on American Environmental History as it relates to commodification and industrialization
Security or portfolio that will be evaluated to securities : When selecting a benchmark, it is important to match the security or portfolio that will be evaluated to securities:
How standardization can lead to a format wa : Define first and second movers. How do these two entities interact within and industry, and who learns what as the industry takes shape?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd