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Risks and benefits of starting production operations overseas: select two countries. India and Brazil

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The organization that you work for is currently in the process of setting up a production facility overseas. You have been asked to present a proposal comparing the risks and benefits of starting operations in two foreign countries.

For this assignment you may choose any two foreign countries, except China, for comparison. Use your text and the web to locate information on the types of risk and the background on the two countries. In this proposal you will provide a recommendation as to which country should be selected for the project.

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I would probably choose India because of an abundance of low-cost labor and a reputation for high-quality work. India is a proven outsourcing source for IT and for other production companies. ...

Solution Summary

In a 3275 word solution, the subject of overseas production operations is thoroughly explored for two countries: India and Brazil. The solution compares to the two economies and makes a choice about the preferred country.

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Direct Foreign Investment Decision Proposal and Presentation

Prepare a 2000-word proposal in which you select the optimal financing and investment strategy for your scenario. Include a PowerPoint file summarizing your proposal with at least 5 slides.
Include the following information in your proposal:

o Identify which country you chose and why. Use India and Brazil

o Identify foreign exchange rate data.

o Use foreign exchange and cost of capital data to determine appropriate capital sources.

o Conduct a sensitivity analysis, based on the following questions:

What if funds are blocked? How does this affect the parent organization?

What if the subsidiary provided funds?

How does the source of capital affect the subsidiary and parent organization?

What sources of capital would minimize the cost of capital to the subsidiary?

What happens if the country you chose provides incentives to invest? Now that your organization is profitable, the country is taking incentives back. How do you determine the residual value at the end of the project life?

How is the value of an organization determined from the following perspectives?

o Expiration of project life
o Friendly or unfriendly buyout
o Economic decision to change locations
o Nationalization or confiscation of organization

Format your paper according to APA standards.

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