To assess your ability to:
• Determine the reporting currency of a non-US public firm.
• Explain the concept of the time value of money and the principle of compound growth.
• Analyze and conclude investment in the a) equity (stock) or b) debt (bonds) of the company denominated in the foreign currency.
Brazil in regard to it energy producing industry
1. Read the Chapters 16 and 17 of your textbook.
2. Review Chapter 4-Understanding the Global Context of Business, especially the section on exchange rates.
3. Refer back to Week 2 when you chose the country and industry for your use in the course: Project: Company & Industry Selection
4. For your chosen non-US public firm, determine its reporting currency, i.e., the currency (other than the U.S. dollar) in which its financial statements and other financial reports are expressed, and complete the following table for that currency in terms of the U.S. dollar either in American terms (number of U.S. dollars per one unit of the foreign currency) or in European terms (number of foreign currency units per one U.S. dollar). Please be consistent in how your express the exchange rates. Sources for this information include:
Currency Today’s Date Spot Rate One Year ago Spot Rate Today
5. Assume you are a U.S.-based investor with USD 1000 to invest and answer the questions below:
a. If you had converted the USD 1000 into the foreign currency one year ago at the above spot rate, then how much in foreign currency would you have received?
b. If you converted the foreign currency received one year ago back into US dollars at today’s spot rate, how many U.S. dollars would you have now?
c. Has the foreign currency depreciated, appreciated, or not changed in value relative to the U.S. dollar over the past year?
d. What has been the percentage change?
e. Include your results as an attachment to the Business Brief below.
6. For the non-US public company you have chosen, consider whether you would invest in the a) equity (stock) or b) debt (bonds) of the company denominated in the foreign currency. Assume you have a one-year investment horizon and write a 1-page analysis according to the Business Brief Guidelines. Complete sentences must be used (bullets not acceptable). Your analysis must be written using a concise writing style. Your brief should answer all of the questions posed above.
7. Submit your work to Turnitin.com. Revise your paper based on the Originality Report you receive. (See instructions under About TurnItIn.com in the MBA Toolbox.)
8. Check your writing style by using Grammarly. (See instructions under Submit ToGrammarly in the MBA Toolbox.) Correct your business brief as needed.
Project 7: Brief Rubric
Total 90 points
Determines the reporting currency of the selected non-US public firm.
Determines the reporting currency of the selected non-US public firm and demonstrates solid ability to accomplish the assignment.
Answers the questions for Action Item 5.
All of the required questions are answered and the answers are correct and of high quality.
Analyzes and concludes investment in the a) equity (stock) or b) debt (bonds) of the company denominated in the foreign currency.
Analyzes and concludes investment in the a) equity (stock) or b) debt (bonds) of the company and demonstrates solid ability to accomplish the assignment.
Integrates established business environment principles into the discussion.
Consistently does a good job of integrating established business environment principles into the discussion
Synthesizes relevant information and materials to provide evidence of critical thought.
Consistently and effectively synthesizes information, which provides strong support to main ideas.
Develops ideas with clarity and logic.
Develops ideas with clarity and logic. Ideas flow smoothly from one to another and are clearly linked to each other.
Uses supporting documentation that has been properly referenced and cited.
Consistently uses supporting documentation that is properly referenced and cited.
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