Required assignment two-analyzing risk

Assignment Help Business Management
Reference no: EM131110466

Assignment 2: Required Assignment 2-Analyzing Risk

In this assignment, you will write an executive summary analyzing the exchange risks, country risks, and political risks the company executive team needs to be aware of in building a manufacturing facility in Brazil. Your summary will also provide a recommendation of the location, the company should select for building a new manufacturing facility. In support of your recommendation, you will refer to the analysis performed and include all calculations.

In addition, for this assignment, using the information in your executive summary, you will create a PowerPoint presentation which will include your recommendation of where to build the new facility, the supporting analysis for your recommendation, and the risks involved in building a new facility in Brazil.

Scenario:

Your employer, GBATT, headquartered in the United States of America, has decided to expand operations into Brazil. Although the decision to expand has been made, the CFO has asked for an analysis of the risks associated with the expansion. Your instructions are to analyze specific risks associated with building a manufacturing facility in Brazil. Include a description of each of the following types of risks and analyze their impact on the decision to build the new facility.

Exchange risksCountry risksPolitical risksFor the expansion, GBATT is exploring which of two possible approaches to take for constructing a new manufacturing facility in Brazil. In addition to analyzing the risks associated with the expansion, you have been asked to provide analysis for selecting the best approach for the new facility. The following is the information the CFO provided to you to assist in your analysis.



GBATT's current capital structure is:

  • 60% equity and 40% debt.
  • Stockholders require 6% return on their investment.
  • Bondholders require a 3% return.
  • The corporate tax rate is 35%.
GBATT has narrowed the choice between two facilities in two different parts of the country. Preliminary analysis has been completed and an estimate of the future net cash flows for each choice has been provided. The original cash flows were provided in U.S. dollars. Dollars are in thousands.

Year

Choice A

Choice B

0

($15,000)          

(10,000)

1

2,000

1,500

2

5,000

4,000

3

6,000

5,000

4

6,000

5,000

5

4,000

3,000

After completing the risk analysis, use the information from the chart above to complete the following:

  1. Calculate GBATT's WACC.
  2. Using the WACC and the above cash flows, calculate the NPV of each project.
  3. Justify the importance of knowing a company's WACC and NPV.
  4. Recommend the facility to build based on the NPV.
  5. Use current exchange rates to convert the NPV's to the Brazil real.

Reference no: EM131110466

Questions Cloud

Major advantages and disadvantages of a business : Explain the major advantages and disadvantages of a business owner with minimal accounting experience maintaining the company's books instead of hiring an accountant.
Calculate the us dollar translated figures : Calculate the U.S. dollar-translated figures for the two ending time periods, assuming that between December 31, 2112, and December 31, 2113, the euro has appreciated against the U.S. dollar by6%.
Explain the relationship among the gospels : How would you explain the relationship among the Gospels to someone who was not familiar with the Bible? Which Gospel do you think offers the best overview of the gospel of Jesus Christ? Why?
Define these three categories : Define these three categories, and use a two-dimensional figure to illustrate how the splitting is performed.
Required assignment two-analyzing risk : In this assignment, you will write an executive summary analyzing the exchange risks, country risks, and political risks the company executive team needs to be aware of in building a manufacturing facility in Brazil.
Write a recursive function which accepts a string : Write a recursive function which accepts a string and its length and determines if the string is a palindrome. A palindrome is a string that reads the same frontwards and backwards.
How this sample of data points is nonlinearly transformed : The example given in Fig. 5.1b depicts a spherically separable dictomy Assume that the four data points outside the separating surface lie on a circle and that the only data point inside lies at the center of the separating surface
Examine delusions more closely and weigh : Think about some examples of delusions that you may have encountered or witnessed in your recent experiences or that have been depicted in literature, plays, and film.
Calculate the first fundamental form of s : Let S be the surface parametrized by X: U → R3, where X(u, v)=(u, v, u2 - v2), Calculate the first fundamental form of S in terms of (u, v)

Reviews

Write a Review

Business Management Questions & Answers

  Caselet on michael porter’s value chain management

The assignment in management is a two part assignment dealing 1.Theory of function of management. 2. Operations and Controlling.

  Mountain man brewing company

Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. Due to increase in the preference for light beer drinkers, Chris Prangel wants to introduce light beer version in Mountain Man. An analysis into the la..

  Mountain man brewing company

Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. An analysis into the launch of Mountain Man Light over the present Mountain Man Lager.

  Analysis of the case using the doing ethics technique

Analysis of the case using the Doing Ethics Technique (DET). Analysis of the ethical issue(s) from the perspective of an ICT professional, using the ACS Code of  Conduct and properly relating clauses from the ACS Code of Conduct to the ethical issue.

  Affiliations and partnerships

Affiliations and partnerships are frequently used to reach a larger local audience? Which options stand to avail for the Hotel manager and what problems do these pose.

  Innovation-friendly regulations

What influence (if any) can organizations exercise to encourage ‘innovation-friendly' regulations?

  Effect of regional and corporate cultural issues

Present your findings as a group powerpoint with an audio file. In addition individually write up your own conclusions as to the effects of regional cultural issues on the corporate organisational culture of this multinational company as it conducts ..

  Structure of business plan

This assignment shows a structure of business plan. The task is to write a business plane about a Diet Shop.

  Identify the purposes of different types of organisations

Identify the purposes of different types of organisations.

  Entrepreneur case study for analysis

Entrepreneur Case Study for Analysis. Analyze Robin Wolaner's suitability to be an entrepreneur

  Forecasting and business analysis

This problem requires you to apply your cross-sectional analysis skills to a real cross-sectional data set with the goal of answering a specific research question.

  Educational instructional leadership

Prepare a major handout on the key principles of instructional leadership

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