Prompt: You are an employee in the Financial Department in a medium sized company. The company must determine the feasibility of the company making an investment in a new product line overseas or keeping in the US.
Instructions:
You will NOT develop the actual case analysis and provide an outcome. For this assignment, in a minimum of 600 content words, you will develop an outline of the necessary qualitative and quantitative factors and reasons for including in analyzing the scenario presented. Also, discuss the similarities and differences between investing in the US and in a foreign country.
Solved by verified expertThere are a few key differences that a company must take into account when considering an investment in a foreign country as opposed to the United States. The first is the political risk. In the United States, the government is relatively stable and the legal system is well-established. This means that there is less risk that the government will suddenly change the rules or that the company will not be able to enforce its contracts. In a foreign country, there is always the risk that the government will cha
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Another key difference is the cultural risk. In the United States, there is a relatively homogeneous culture, which makes it easier for companies to do business. In a foreign country, there can be a wide variety of cultures, which can make it difficult for companies to understand and cater to the needs of the local market.
Finally, there is the exchange rate risk. When a company invests in a foreign country, it is exposed to the risk that the value of the currency will change. If the currency of the country in which the company is investing falls in value, the company will lose money. If the currency of the country in which the company is investing rises in value, the company will make money.
When considering an investment in a foreign country, a company must take all of these risks into account. It is important to weigh the potential benefits of the investment against the risks. Only by doing so can a company make an informed decision about whether or not to invest in a foreign country.
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