What do you think about the vice president's remarks?
Added on 2020-05-08
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Managerial Finance1| Page
Table of ContentsWhat is your reaction to the vice president's premise? True? False? Why? Is it really that simple?.........................................................................................................................................................3Describe other types of risk that play a role in making such a decision to expand internationally.3Investment diversification.......................................................................................................................3Overseas credit........................................................................................................................................3Should you always assume that foreign projects need to generate higher returns when compared with equivalent projects in the U.S.? Why or why not?..................................................................5Conclusion.......................................................................................................................................5References........................................................................................................................................62| Page
What is your reaction to the vice president's premise? True? False? Why? Is it really thatsimple?I think the vice president is right because there are many risks and benefits linked with overseasoperations. When the vice president would expand into new markets overseas then there wouldbe lower cost of cheaper labor and there would be higher rate of returns. Investors would get anopportunity of engaging in international diversification of portfolio assets since they would assistin better risk-adjusted returns ("International Journal of Managerial Finance", 2016).Describe other types of risk that play a role in making such a decision to expandinternationally.There are lots of advantages of investments in abroad property, but there are lots of things thatthe business has to think as there are risks also to be considered when one operates overseas.Investment diversificationOne of the principal advantages of investments in overseas operations is the diversifications thatcan be brought to the investments diversifies in terms of assets as well as in terms of geography(Gitman & Zutter, 2015). Since the rates of property have a tendency to link with the destiniesof the bigger wealth, and thus investment in global property gives exposure to the prosperity orelse of a new economy (or defence from a long-drawn-out recession in the own economy).Overseas creditInvestors who have overseas investment portfolios have a wider credit base since they canaccesscredit in overseas nationswhere they have noteworthy investments. This is beneficial3| Page
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