Executive Summary
Resources
For this final component of your course project, prepare an executive summary of your findings and recommendations, using PowerPoint software. Develop your PowerPoint presentation as if you were presenting your recommendations to a senior management team at Wolverine Corporation. Include all of your quantitative data in an appendix.
The PowerPoint presentation should be 8–10 slides. Cite all resource materials using APA (6th edition) style and formatting.
The PowerPoint presentation you submit must include your slides and completed notes pages (a view format provided in PowerPoint) that document the narration you would use with each slide. The slides you create should be original, creative, and dynamic. When appropriate, use visuals to convey your ideas.
Submit your PowerPoint presentation and appendix with your quantitative data in the assignment area.
Refer to the course project description to make sure you have met all of the requirements.
Note: Your instructor may also use the Writing Feedback Tool to provide feedback on your writing. In the tool, click the linked resources for helpful writing information.
The fundamental objective of your course project is to conduct a strengths, weaknesses, opportunities, threats (SWOT) analysis of the global business environment. In addition, you will identify specific trends and opportunities as they apply to multinational corporations (MNCs) seeking new opportunities. Results from this endeavor will then be applied to New Zealand as a targeted foreign host location for a hypothetical MNC, the Wolverine Corporation, in conjunction with a country risk analysis. Through this process, you will assess New Zealand’s political and financial risks with the objective of establishing a foreign subsidiary in that country.
Wolverine Corporation Background
This scenario is from your course textbook. After conducting a comprehensive country risk analysis of New Zealand, the Wolverine Corporation, a U.S.-based MNC, has decided to establish a subsidiary in that country as its mode of market entry. The following information has been gathered to assess the feasibility of this project:
- The initial investment required is $50 million in New Zealand dollars. Given the existing spot rate of US$0.50 per New Zealand dollar, the initial investment in U.S. dollars is $25 million. In addition to the NZ$50 million initial investment for plant and equipment, NZ$20 million is needed for working capital and will be borrowed by the subsidiary from a New Zealand bank. The New Zealand subsidiary will pay interest only on the loan each year at an interest rate of 14 percent. The loan principal is to be paid in 10 years.
- The project will be terminated at the end of Year 3, when the subsidiary will be sold.
- The price, demand, and variable cost of the product in New Zealand are as follows:
|
Year
|
Price
|
Demand
|
Variable Cost
|
|
1
|
NZ$500
|
40,000 units
|
NZ$30
|
|
2
|
NZ$511
|
50,000 units
|
NZ$35
|
|
3
|
NZ$530
|
60,000 units
|
NZ$40
|
- The fixed costs, such as overhead expenses, are estimated to be NZ$6 million per year.
- The exchange rate of the New Zealand dollar is expected to be $0.52 at the end of Year 1, $0.54 at the end of Year 2, and $0.56 at the end of Year 3.
- The New Zealand government will impose an income tax of 30 percent. In addition, it will impose a withholding tax of 10 percent on earnings remitted by the subsidiary. The U.S. government will allow a tax credit on the remitted earnings and will not impose any additional taxes.
- All cash flows generated by the subsidiary are to be sent to the parent at the end of each year. The subsidiary will use its working capital to support ongoing operations.
- The plant and equipment are depreciated over 10 years using the straight-line depreciation method. Since the plant and equipment are initially valued at NZ$50 million, the annual depreciation expense is NZ$5 million.
- In three years, the subsidiary is to be sold. Wolverine plans to let the acquiring firm assume the existing New Zealand loan. The working capital will not be liquated but will be used by the acquiring firm. When it sells the subsidiary, Wolverine expects to receive NZ$52 million after subtracting capital gains taxes. Assume this amount is not subject to a withholding tax.
- Wolverine requires a 20 percent rate of return on this project, translated to mean its hurdle rate or weighted average cost of capital.
Project Objectives
To successfully complete this project, you will be expected to:
- Conduct a country risk analysis to assess the MNC’s exposure in the host country.
- Perform capital budgeting analyses from the perspective of the parent company to determine the value of the projected investment.
- Demonstrate the use of foreign exchange risk management techniques and their application.
To achieve a successful project experience and outcome, you are expected to meet the following requirements.
Research and Analysis
You will need to complete the following assignments, leading up to the final project component due in Unit 6 (the Executive Summary):
- Global Business (Unit 1): Your research and analysis begins by examining the current global business environment and trends in general terms and continues to examine the types of business opportunities that might be present in New Zealand.
- NPV Analysis (Unit 2): The next step requires you to determine the net present value (NPV) of this project and recommend whether Wolverine should accept or reject it. The use of Excel illustrating your computations is required.
- Financing Analysis (Unit 5): In the financing research and analysis activity, you will gather information on Wolverine’s financing requirements and strategies. Based on this information, you will identify some of the unique challenges that MNCs encounter in their global investment and financing decisions, and options for effectively dealing with these challenges in an era of increasing globalization of business activities.
Executive Summary (Unit 6)
An important aspect of this project is the opportunity to summarize your findings and make recommendations regarding international finance issues to senior leaders within an organization. To that end, you will prepare an executive summary of your findings and recommendations using Microsoft PowerPoint, once you have completed the research and analysis components of your course project. You will develop your PowerPoint presentation as if you were presenting your recommendations to a senior management team at Wolverine Corporation. In Unit 6, you will submit your presentation and all of your quantitative data within an appendix to your instructor for a final grade.
The PowerPoint presentation you submit must be 8–10 slides and must include your actual slides and completed notes pages (a view format provided in PowerPoint) that document the narration you would use with each slide. The slides you create should be original, creative, and dynamic. When appropriate, use visuals to convey your ideas.
Effective Presentations
Make sure you review the presentation for flow and content, so it efficiently and competently presents significant financial analysis elements. It should demonstrate your ability to tailor the analysis for formal presentation to the audience.
Considerations for preparing a professional PowerPoint presentation include the following:
- Use a consistent design throughout the presentation. An easy way to do this is to use one of the templates provided.
- When applicable, enhance text-only slide content by developing relevant images for your presentation.
- Use consistent horizontal and vertical alignment of slide elements throughout the presentation, leaving plenty of space around images and text.
- Use bullets, unless showing rank or sequence of items.
- Use simple tables to show numbers, with no more than four rows and four columns. Reserve more detailed tables for the written summary.
- Use sans serif fonts such as Arial or Verdana, and use no smaller than 28-point text.
- Use no more than five bullet points and eight lines of text total per slide.
- Use animations only when needed to enhance meaning. If they are needed, use them sparingly and consistently.
- Include a reference slide to summarize any sources cited in your work.
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