Reference no: EM13381971
International Financial Management
QuickNourish plc is considering new developments abroad. The two prime candidate countries are the United States and India. The main rivals of QN (Fatmore plc) have recently pulled out of the US and are also thinking of investing in India. Not being in India now it is feared might mean difficulties in the future as they have only recently invited supermarkets to invest in their country. This is not thought to be the case for the US.
The Finance Director, William Money, holds a meeting of the finance team to consider the implications of the two options.
The first consideration Mr Money suggests is to identify the macro sovereign risks and problems and their potential effect on QN's competitive advantage (in fact QN has not established what its competitive advantage really is, though it has been very successful in the UK and the euro area).
Mr Money then addresses the problem of valuing the 2 potential investments and asks you to consider how they might be valued.
At a more detailed level, Mr Money is concerned about managing the current risk and provides some illustrative data for the Indian Rupee. He asks the question: how are we going to manage our business operations without always having to go to the marketplace to buy derivatives to protect ourselves from the various risks.
Finally, Mr Money notes that interest rates are higher in India so at least any money we hold there will be earning a good return.
On successful completion of the module a student will be able to:
assess the properties of various forms of exposure to international financial risks
measure the effect of exchange rate variation on financial management
prepare a report on the management of risk in an international environment.
evaluate the consequences of operational and strategic decisions in an international context and through financial analysis.
judge the significance and role of alternative future and financial structures in managing international operations.
assess the relevance of exchange rate risk management applied to cross-border operations.
Attachment:- Assessment.zip