Direct Foreign Investment Decision ProposalStar Jeans Company has been weighing the pickax to enter into abroad territory to do patronage. There atomic number 18 several incidentors that have played a part in this decision; one that has taken over 3 weeks to conclude. subsequently careful examination and loaded analysis, the financial team at Star Jeans Company has devised the optimal financial and investment system for entry into brazil nut. Team B will present this schema and discuss a range of analysis to support that decision, ranging from foreign exchange rate to a contingency plan.
Reasons for Choosing BrazilOne of the most grievous questions that one would ask is why invest in Brazil? One major reason is a cultural disparity that will provide a fresh voice on the product, and display what Star Jeans Company is capable of, worldwide. An even more(prenominal) prominent reason is the financial advantage that a linked States based company would have over keeping their business domestic. The exchange rate of a Brazilian sure to a U.S. dollar is 1:.567537. This exchange rate makes possible the payoff of fewer products for more money because the exchange rate is close to 2:1 in favor of the domestic dollar.
?As a country and emerging economy, Brazil remains a very attractive market for foreign investment receiving 3% of the total global foreign direct investment in 2004, representing the largest allocation in the last six years? (Alvez, 2007, 3). This fact makes evident that Brazil is an up and coming economy and is whence a wise choice for Star Jeans Company.
Foreign convert Rate DataAs referenced above, the exchange rate of the Brazilian real to the U.S. dollar is 1:.5674537. What this allows a U.S. based company to do, is pedigree many different sources of raising capital.
Appropriate Capital SourcesSensitivity AnalysisIf monetary resource are BlockedStar...
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