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Conduct a sensitivity analysis, based on the following questions:
What if funds are blocked? How does this affect the parent organization?
What if the subsidiary provided funds?
How does the source of capital affect the subsidiary and parent organization?
What sources of capital would minimize the cost of capital to the subsidiary?
What happens if the country you chose provides incentives to invest? Now that your
organization is profitable, the country is taking incentives back. How do you
determine the residual value at the end of the project life?
How is the value of an organization determined from the following perspectives?
Expiration of project life
Friendly or unfriendly buyout
Economic decision to change locations
Nationalization or confiscation of organization
Identify available alternative investment and financing decisions, and make a final
recommendation.
Use the capital budgeting technique to justify your conclusions. Support your choice
of the discount rate used in the calculation of net present value.
Develop a contingency plan based on your sensitivity analysis. Modify your
investment and financing strategy based on the identified changing global risk
factors.
Include appropriate spreadsheets displaying a financial analysis in your proposal. If
you used an electronic source, include the Uniform Resource Locator (URL). If you
used a print source, attach a copy to your paper.
Format your paper consistent with APA guidelines.
Include a minimum of five cited references in the body of the paper.
FIN 403 Week 5 Summary