Direct Foreign Investment

Paper Summary:

This paper analyzes why Thailand may be considered better for direct foreign investment than Ghana. The paper discusses exchange rate data, capital sources, sensitivity analysis, alternative investment and financing decisions, capital budgeting and contingency plans. It looks at the risks that may be involved with direct foreign investment in Thailand and describes the rationale used in the selection of Thailand as the clear choice for an investment.

Outline:
Country Selection
Exchange Rate
Capital Sources
Sensitivity Analysis
Alternative Investment/Financing Decisions
Capital Budget
Contingency
Conclusion

From the Paper:

"As is readily apparent, decisions as to what country to select when considering a direct foreign investment are often highly complicated. Additionally, even when a country is selected, a multitude of complex factors make up the various strategies that a firm must implement to hedge the various risks involved in conducting business overseas. With regard to the service firm, the decision was made to expand operations in the country of Thailand. With a healthier economy, a relatively stable government, and friendlier business environment, Thailand was determined to offer better investment opportunities than Ghana. This is not to imply that Ghana would not constitute a wise investment decision, as many risks inherent to the country could be mitigated; however, Thailand's socio-economic, political, and exchange rate circumstances were determined to be more favorable than Ghana's."

Sample of Sources Used:

• Bangkok Post. 2008. Seafood Sector Potential. Retrieved February 9, 2008 from: http://www.bangkokpost.com/
• Bodie, Z., Kane, A., & Marcus, A. (2007). Essentials of Investments (6th ed). New York: The McGraw-Hill Companies, Inc.
• Brigham, E., Crum, R., Houston, J., (2005). Fundamentals of International Finance (1st ed.). Cleveland: Thomson South-Western.
• Brink, C. (2004). Measuring Political Risk. Retrieved February 10, 2008 from: http://books.google.com/books?id=wkQSo1AOGZ0C&pg=PA170&lpg=PA170&dq=mnc+capital+contingency+planning&source=web&ots=mGIOsahsrQ&sig=29J_SgV8hAr3nqXqO2Stw7kEn3w#PPA170,M1
• Crum, R.L., Brigham, E.F., & Houston, J.F. (2005). Fundamentals of International Finance (1st ed.). Ohio: Thomson/South-Western.

More papers on Direct Foreign Investment:

• Essay # 39049 : "Direct Foreign Investment."
• Term Paper # 120921 : "Foreign Investment in the U.S. Economy"
• Essay # 3827 : "Foreign Investment in Asia"

APA Citation:

MLA Citation: