tailieunhanh - Lecture International financial management - Chapter 14: Multinational capital budgeting

In this chapter: Compare the capital budgeting analysis of an MNC’s subsidiary versus its parent, demonstrate how multinational capital building can be applied to determine whether an international project should be implemented, show how multinational capital budgeting can be adapted to account for special situations such as alternative exchange rate scenarios or when subsidiary financing is considered, explain how the risk of international projects can be assessed. | 1 1 14 Multinational Capital Budgeting Compare the capital budgeting analysis of an MNC’s subsidiary versus its parent Demonstrate how multinational capital building can be applied to determine whether an international project should be implemented Show how multinational capital budgeting can be adapted to account for special situations such as alternative exchange rate scenarios or when subsidiary financing is considered Explain how the risk of international projects can be assessed 2 Chapter Objectives 2 Subsidiary versus Parent Perspective Tax Differentials: different tax rates may make a project feasible from a subsidiary’s perspective, but not from a parent’s perspective. Restrictions on Remitted Earnings: governments may place restrictions on whether earnings must remain in country. Excessive Remittances: if the parent company charges fees to the subsidiary, then a project may appear favorable from a parent perspective, but not from a subsidiary’s perspective. Exchange Rate Movements: earnings converted to the currency of the parent company will be affected by exchange rate movements. Exhibit Process of Remitting Subsidiary Earnings to Parent 4 4 Subsidiary versus Parent Perspective The parent’s perspective is appropriate when evaluating a project since the parent’s shareholders are the owners and any project should generate sufficient cash flows to the parent to enhance shareholder wealth. One exception is when the foreign subsidiary is not wholly owned by the parent and the foreign project is partially financed with retained earnings of the parent and of the subsidiary. Input for Multinational Capital Budgeting An MNC will normally require forecasts of the financial characteristics that influence the initial investment or cash flows of the project. Initial investment - Funds initially invested include whatever is necessary to start the project and additional funds, such as working capital, to support the project over time. Price and consumer demand – . | 1 1 14 Multinational Capital Budgeting Compare the capital budgeting analysis of an MNC’s subsidiary versus its parent Demonstrate how multinational capital building can be applied to determine whether an international project should be implemented Show how multinational capital budgeting can be adapted to account for special situations such as alternative exchange rate scenarios or when subsidiary financing is considered Explain how the risk of international projects can be assessed 2 Chapter Objectives 2 Subsidiary versus Parent Perspective Tax Differentials: different tax rates may make a project feasible from a subsidiary’s perspective, but not from a parent’s perspective. Restrictions on Remitted Earnings: governments may place restrictions on whether earnings must remain in country. Excessive Remittances: if the parent company charges fees to the subsidiary, then a project may appear favorable from a parent perspective, but not from a subsidiary’s perspective. Exchange Rate .

• Tài chính doanh nghiệp
• International financial management
• Quản lý tài chính quốc tế
• Lecture International financial management
• Multinational capital budgeting
• International project
• Initial investment
• International financial markets
• Foreign exchange market
• International money market
• Financial statement
• International trade transactions
• Financial management
• Fundamentals of financial management
• Financial statement analysis
• International bond market
• International equity markets
• International trade finance
• Multinational cash management
• International equity financing
• International capital market equilibrium
• International capital budgeting
• The foreign currency hedging decision
• International banking
• Money market
• International portfolio investment
• Balance of payments
• Current account
• Financial accounts
• International flow of funds
• Exchange rate determination
• Government influence
• Currency derivatives
• International tax environment
• Financial environments
• Bài giảng International financial management
• Tài chính quốc tế
• Multinational financial management
• Tăng trưởng của MNCs
• Direct foreign investment
• Financing international trade
• International cash management
• Lesson International financial management
• Management of translation exposure
• Translation Exposures
• Alternative currency translation methods
• Translation exposure
• International business
• International marketing
• International operations management
• International strategic management
• International strategic alliances
• Exchange rates
• International Fisher Effect
• Purchasing power parity
• International diversification
• Lecture International business
• International environmental forces
• Organizational environment
• Financial management decisions
• International flow
• International arbitrage
• Interest rate parity
• Relationships among inflation
• International monetary system
• International parity relationships
• Forecasting foreign exchange rates
• International financial
• Managing transaction exposure
• Country risk analysis
• Lecture Multinational financial management
• International banking and money market
• International banking services
• Capital adequacy standards