FN7226 Managing Resources in the International Business Environment Component 2

FN7226 Component 2 – Individual Report

Learning Outcomes Evidenced by this assignment:

Knowledge

1. Make informed strategic choices based on an understanding of the financial and economic environment and of key institutions within it
2. Determine the likely impact of changes in financial and economic circumstances on organisations and industries with which they are associated.

Thinking skills

3. Appraise the financial performance and standing of a business or business unit
4. Determine the likely impact of changes in financial and economic circumstances on organisations and industries with which they are associated.

Subject-based practical skills

5. Critique and contribute to project appraisal decisions
6. Assess the appropriate means whereby international businesses can raise and manage financial resources

Skills for life and work (general skills)

7. Make informed contributions to policy debates within their industry or sector.

8. Communicate effectively on financial and economic matters to both expert and non- expert audiences

Submission procedure:

• Each student will turn his/her report in via TURNITIN.
• Submission links will be made available according to Seminar Groups.
• Return of feedback and marked work:
• All feedback and marking will be online and preliminary results will also be published online, 2-4 weeks after the submission deadline.
• Details of the task.

Question

You are International Business Manager at a UK based company. Your company has identified USA and Europe as potential markets and wish to expand asap. You are responsible to contribute to plan a full-scale expansion. You are requested to analyse both projects and advise.

In considering such large project, you must work out the risk of each project, cost of capital (Hint: you can use prevailing interest rates and inflation in each region to base your calculation) and calculate NPV. Allocate discount rate for each project according to current international business climate and justify why you allocated the discount rate for each region. Discuss how you aim to manage international risks.

Projected cash flows in respective currencies:

Year	Net Cash Flow – USA (USD)	Net Cash Flow – Europe (EUR)
0	-20 million	-20 million
1	2 million	2 million
2	4 million	3 million
3	5 million	4 million
4	6 million	8 million
5	8 million	8 million

Task:

1. Briefly discuss viability of both projects in today’s global business context. Based on your discussion allocate and justify discount rate for both projects. (30 Marks)
2. How much investment (GBP) is needed for each project and what is the NPV of each project? Use spot and forward exchange rates to discuss. (30 Marks)
3. Considering current world economic climate, the future exchange rates are uncertain. How would you analyse/anticipate the change in exchange rates? Write a brief proposal to mitigate impact of possible exchange rate fluctuations (30 Marks)
4. Discuss your calculations and advise which project should be selected. (10 Marks)

General Presentation

The report must be word processed, double spaced with 25mm margins. The font size must be such that the project is easily readable e.g. a font size of either 12 or 14 point (excluding headings). Use widely-used fonts such as Times New Roman, not those that might be considered informal or unusual. Pages must be sequentially numbered.

Chapters, sections and sub-sections must be clearly identified and sequentially numbered or lettered, with separate chapters beginning on a new page.

Diagrams, graphs, figures, tables, pictures and charts must be incorporated into the report and they should be clearly labelled and referenced.

References must be accurately provided in the text using the Harvard System (see Saunders et al., 2009). All quotations must be acknowledged and correctly presented 

Managing resources in the international business environment within the text i.e. other than very short ones, quotations should be indented and in single spacing. (See Saunders et al for further details).

Number of words should be mentioned at the end and before any bibliography.

Skills Advice

Refer to your material provided in your skills modules to make sure that you have conformed to academic conventions

Referencing.

The university expects students to use Harvard referencing as specified in the book ‘Cite Them Right’.

• Refer to http://www.uel.ac.uk/lls/support/harvard for further advice and a link to an online version of Cite them Right
• You should be careful to include citations within your work as well as a reference list at the end. Unreferenced work will fail.
• Your word count should not include your abstract, or reference list. You should provide your word count at the end of your report.
• Should not exceed the word count by more than 10%; if it does, it will result in a penalty of 10% of your marks for your work.
• If your work is significantly shorter, then you will probably have failed to provide the level of detail required.

FN7226 Marking Criteria

MARKING CRITERIA – AT-A-GLANCE GUIDE In deciding the mark, you will are to be awarded for an essay, report, test or examination, staff in all your modules are guided by the following assessment criteria
	70% AND ABOVE	60-69%	50-59%	40-49%	35-39%	34% OR LESS
	EXCELLENT	VERY GOOD	GOOD	PASS	FAIL	BAD FAIL
Coverage of question Relevance to question	Comprehensive Entirely relevant	Broadly Relevant	Reasonable Not always directly relevant	Incomplete Includes irrelevant material	Patchy Doesn’t address question	Complete inability to understand the question
Structure of discussion Clarity of discussion Originality of discussion	Good Clear Shows original thought	Good Clear No/little originality	Reasonable Lacks precision No originality	Reasonable Incomplete No originality	Poor No clear structure No originality	No structure
Understanding of technical complexity	Thorough	Sound grasp	Reasonable grasp	Some understanding	Inadequate grasp	Failure to grasp
Coverage of appropriate reading	Wide coverage	Solid coverage	Some coverage of essential reading	Inadequate coverage/ reading	Minimal reading shown	Minimal reading shown
Understanding of content of reading	Ideas from sources carefully and accurately explained, in context, achieving a synthesis	Good understanding, with accurate exposition	Some understanding, but incomplete and unclear explanation	Confused exposition, with inaccuracies	Confused Unable to see key connections and fails to grasp context	Very confused
Correct referencing /documentation	Comprehensive Correct	Good	Adequate	Incomplete Minimal	Poor documentation /none	No documentation Reliance on paraphrasing from texts and/or direct copying from