投资决策分析1.ppt

International Financial Management Case Study 国际金融管理课程案例分析
Chapter 14
Multinational Capital Budeting
Blades, Inc.
Multinational Capital Budgeting
High growth potential in Thailand
Establish a subsidiary in Thailand for 10years,then sell.
Continue sell to Entertainment Product, of 180,000 pairs of Speedos at fixed prices,for one more 4594 108,000 pairs at subsidiary reduce cost of 300 baht each.
If set new subsidiary ,Entertainment may renew 180,000pairs contract at 4594baht ,if not renew contract ,contract 5,000paris contract at not fixed price. firtst year at 5,000baht each.
Other contract 120,000pairs at first two years , 220,000 for the following years. at not fixed price. firtst year at 5,000baht each.
Information provided: cost at 550M,plant and equipment at 300m, straight line depreciation at 10years.2. Variable cost at 3,500baht each3. fixed administrative expenses at 25m next year
4. Current spot rate of baht to US$, depreciates at 2% per year
5. Income tax rate 25%,withholding tax 10%,no other tax after remitting back to US.
6. After 10years ,sell at 650m
annual inflation at 12% yearly to Revenue, Variable cost and fixed cost
a 25% return
9. All excess fund send back to US.
Questions:
1. Should the sales and the associated costs of 180,000 pairs of roller blades to be sold in Thailand under the existing agreement be included in the capital budgeting analysis to decide whether Blades should establish a subsidiary in Thailand? Should the sales resulting from a renewed agreement be included? Why or why not?
2. Using a spreadsheet, conduct a capital budgeting analysis for the proposed project assuming that Blades renews the agreement with Entertainment Products. Should Blades establish a subsidiary in Thailand under these conditions?
3. Using a spreadsheet, conduct a capital budgeting analysis for the proposed project assuming that Blades does not renew the agreement with Entertainment