logo

Finance for International Business Assignment

   

Added on  2020-06-06

12 Pages3384 Words43 Views
Finance for InternationalBusiness

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1Overview................................................................................................................................1Theory of FOREX:.................................................................................................................2Measurement of WACC for EuroJet......................................................................................5Measurements for NPV of EuroJet.........................................................................................6CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................10

INTRODUCTIONIn the present assessment, there will be discussion based on the impacts of Brexit overEuro-jet while its big market hub UK is getting out from the European union. The organisationhas 40% of the revenue from UK but the governance policies are of Europe government. Thus, itcan be said that the existence of such country from this group will affect the profitability andbusiness of this organisation. The report will also be beneficial in determining the ways ortheories under which they can make the necessary improvements in the operational activities.The managers in firm have planned to introduce new aircraft which in turn will be helpful formaking the required improvements in the business. There will be discussion based on the WACCand NPV calculations. Therefore, the need of such measurement will evaluate the favourabledecision making from Eurojet stakeholders.OverviewEurojet is the European airline and operating in various nations such as Europe, NorthAmerica, UK etc. This organisation has a favourable growth since 1980s as it offers the low-costtickets to the passengers. This firm has 300 Boeing B737-800 aircraft which serves flying over1750 routes and several destinations. There have been five main operating centres such asStansted, Brussels, Dublin, Düsseldorf and Milan on which Stansted is the most profitable centreas 40% of flights were operated by such location. There have been various rivalry firms toEurojet in consideration with offering the special offered seats to consumers which makes themto switch the companies (Priewe, 2017). However, apart from the operational obstacles, therehave been various other issues which are being faced by Eurojet in survival. However, the mostunpleasant decision made by UK to leave the European Union group affected various aviationindustries in these two countries. Euroject has 40% of its revenue from UK passengers whichwill reflect the deficit growth in their operational performances. Currently, the firm is operatingover the Governance of European authorities which in turn is helpful for business in having thefavourable rates and policy procedure which will be beneficial for them (Mele, 2017). However,it is assumed that after 2019, there will be influence of UK government in the policies andprocedures which will bring the negative impacts over the revenue gathering of the business.However, it terms with overcoming such major issue and preventing the business fromthe effect of BREXIT, the firm has started making suitable changes in the operations. They have1

planned to introduce Eurojet UK plc which in turn serves the UK citizens as well as have the UKgovernance with the help of leasing the 10 Boeing aircrafts 737. Thus, with such plan they willcontinue to make the fruitful industrial operations. It is being assumed by the owners or directorsof this company that if EuroJet UK Plc will have the sound growth in the coming time then theywill acquire such company. They have planned to make the lease of such 10 Boeing aircraft for10 years of period at the fixed annual cost for US$403 Million per annum from 2019 to 2024.They have planned to make the main base of such Aircraft at Stansted in UK which is the bestmarket hub for this aviation industry. Thus, after the completion of such period, EuroJetperiod,EuroJet UK plc will have satisfactory growth in the coming time as in 2024 there will berequirement for refurbishment of aircraft at the cost of 12 million pounds per aircraft. There havebeen calculations which will evaluate the viability of the projects which are introduced by thecompany as well as make suitable changes in the business operations. However, the impact ofBREXIT will negatively influence the market of this corporation in terms with changes in thetaxation, interest rates, currency rates and various norms and regulations will influence theoperations of this business.Theory of FOREX:FOREX is the largest financial market which in turn helps and affect the forex market ofevery country such as currency rates and import or exports. Therefore, there have been variousrules and regulation of various nations which in turn influence the trade and commerce ofbusinesses. In accordance with the aviation industries, there have been influence of variousnations (Dymova, Sevastjanov and Kaczmarek, 2016). There have been variations in economicand political environment in such countries as changing currency rates, taxation policies, lawsand ethics as well as cultural variations. In terms with the EuroJet aviation industry, the firm willbe highly affected by the changes in the market and the impact of BREXIT will influence theoperations of this business (Foreign Exchange Markets and Exchange Rates, 2017). However,the main issue is arising that the fluctuating exchange rates is the main reason behind thefinancial obstacles in industrial operations. There have been various approaches and terms whichwere being the reason for affecting the business of Eurojet in the Forex context such as:Exchange rate:2

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Report on Finance for International Business - Euro Jet
|13
|2887
|36

Finance for International Business TABLE OF CONTENTS INTRODUCTION 3 MAIN BODY 3
|12
|3017
|330

Pestle Analysis of Ryanair
|9
|2959
|70

Ryanair: The Lowest Cost Airline in Europe
|4
|1073
|251

Strategic Management- Ryanair
|10
|2608
|208

Challenges and Opportunities of Brexit for UK Aviation Industry and Growth Slowdown Faced by UK
|11
|4027
|79