Assignment for International Finance for Business

Running head: INTERNATIONAL FINANCE FOR BUSINESS
INTERNATIONAL FINANCE FOR BUSINESS
Name of Student
Name of University
Author’s Note

INTERNATIONAL FINANCE FOR BUSINESS1
EXECUTIVE SUMMARY:
This report discusses about Hatfield Manufacturing Systems plc decision to invest in the
project of opening a manufacturing factory in Turkey. To analyses the decision of
Hatfield Manufacturing Systems plc net present value, internal rate of return and
weighted average cost of capital are to be calculated. The impact of foreign exchange
rate in the business is also being calculated.

INTERNATIONAL FINANCE FOR BUSINESS2
Table of Contents
BACKGROUND OF THE FIRM:.............................................................................3
ADVANTAGE OF CREATING A PLANT IN TURKEY:..........................................3
INVESTMENT PROPOSALS:................................................................................4
Net Present Value Method:.................................................................................4
Internal Rate of Return Method:..........................................................................5
Weighted Average Cost of Capital:.....................................................................6
IMPACT OF FOREIGN EXCHANGE RATE:..........................................................7
Supplier Payments:.............................................................................................7
Hedging:..............................................................................................................7
CONCLUSION AND RECOMMENDATION:..........................................................7

INTERNATIONAL FINANCE FOR BUSINESS3
BACKGROUND OF THE FIRM:
Hatfield Manufacturing Systems plc. is the company who has its business in
United Kingdom. The company basically manufactures 3D printer. The company is the
supplier to other aerospace and motor vehicle industries. The company wants to open a
manufacturing firm in Turkey. The creation of the manufacturing demands the company
to investigate about the investment plan that will assist the management of the company
to decide whether to invest or not. Investment in a project in different country also
demands to enquire about the internal and external factors of the country because it can
affect the company’s plan for establishing a manufacturing firm in that country.
ADVANTAGE OF CREATING A PLANT IN TURKEY:
As per the case study it can be identified that the investment factor of the country
is pretty strong in comparison other countries around the world. The multinational
companies have serious help from the Turkish Government. As the government of
Turkey are very keen to invest in the multinational companies. The government also
supports the business to expand. The Turkey Government mainly invests in improving
the infrastructure. The improved infrastructure of the company assists the business
develop more and realize profit from the market (Turker and Altuntas 2014). The
improve infrastructure also assists the company to reduce the cost of the company. The
improvement in the infrastructure of the country will led to the improvement of the
communication, transportation, electric system, sewage and water system. The
availability of the above mentioned infrastructure assists the business environment to
improve and expand. The automotive industry of Turkey is also very successful, which
assists the industries to bloom. The country also has one of the best aerospace
industries that indirectly also assists the business in the country to expand.
The country’s workforce mainly comprises of young generation, which also
assists the company to gain some of the talented person. The country’s non-agricultural
growth rate is around 11.4%. The high non-agricultural growth rate means the
companies can avail more people from the country. The GDP growth rate of the country
is also high.