country may be the outcome of combination of strategic, behavioural and economic considerations, choice of a specific project within a particular product-market posture calls for evaluation of its economic feasibility. For this purpose, capital budgeting exercise has to be done. A firm should deploy funds in a project if the marginal revenue obtained there from exceeds the marginal cost. For an MNC, capital budgeting involves economic analysis of the firm's direct investment opportunities. Whatever be
Words: 3315 - Pages: 14
mistakes in currency exchange system in Iran Foreign exchange rates is a key point in good performance of economic system in each country. Currency exchange rates is a key variable in regulating incoming and outgoing of capital, importing and exporting goods in an economy. Exchange rates is one of the most important factors in maintaining competition potentials of a country in international markets and as a result, non-oil exportation of the country, and an important factor for being independent
Words: 2031 - Pages: 9
Int. J. of the Economics of Business, Vol. 8, No. 2, 2001, pp. 173 ± 190 The Eclectic (OLI) Paradigm of International Production: Past, Present and Future JOHN H. DUNNING ABSTRACT This article describes the origins, and traces the subsequent evolution of the eclectic paradigm from the mid-1950s to the present day. It does so in the light of the changing characteristics of MNE activity and of the global economic scenario. The article concludes by asserting that the eclectic paradigm still remains
Words: 10410 - Pages: 42
systems c) trade deficits d) inflation rates between nations b 4. Replacing the local foreign currency with the dollar is> a) Seignorage b) Dollarization c) Depreciation d) Appreciation d 5. Adjusting national economic policies to maintain foreign local exchange rates within a specific margin around agreed-upon, fixed central exchange rates is called a) managed float b) ‘beggar-thy-neighbor” devaluation c) dirty float d) target-zone agreement b
Words: 1851 - Pages: 8
INTERNATIONAL BUSINESS MANAGEMEMENT ASSIGNMENT 2 Question 1 When the Mexico’s currency is pegged to the United States dollar, it means that the exchange rate is set and artificially maintained by the government. The rate will not fluctuate from day to day. The pegged exchange rate is usually used to stabilize the value of a currency against the currency it is pegged to which makes trade and investments between the two currency areas easier and more predictable. Pegged exchange rate system can also
Words: 3046 - Pages: 13
into the capital budgeting process of foreign investment. Global Financial Management Vernon’s Product Life-Cycle Theory Raymond Vernon proposed his Product Life Cycle (PLC) theory in the mid 1960’s, based on product development and international trend observations of the US role at the time. The PLC theory stated that new products would first be developed and introduced in the US. Advanced markets, such as Europe and Japan, had their demand grow which caused the US to export the new product
Words: 1060 - Pages: 5
1 year. In the article we will try to study the concerns of a country facing depreciating currency, the factors that led to this depreciation and the measures government can take to stabilize the situation. Most importantly we will see if global economic uncertainty rides over all the other domestic factors to determine strength of a currency especially in developing economies. Why don’t we need a depreciating INR? The persistent decline in rupee is a cause of concern. Depreciation leads to imports
Words: 1731 - Pages: 7
exchange risks of Rutitania Crown against international currency; third, the issue of joining the Euro zone will be analyzed in terms of benefits and drawbacks; next, the taxation effect in the investment decision making will be accessed and finally there will be a discussion on the political environment. THE NATIONAL ECONOMY AND THE IMPLICATIONS FOR THE PROJECT 2.1 The Relationship between National Economy and the Foreign Direct Investment (FDI) The economic growth of the host nation has always
Words: 4204 - Pages: 17
compounded these problems. Russia also suffered from a political crisis where the entire government was fired in 1998, causing for investor confidence to be further eroded. On July 13, 1998, a $22.6 billion financial package from the International Monetary Fund and the World Bank was approved. The purpose of the package was to swap maturing GKO short-term bonds into long-term Eurobonds. This was somewhat successful, however, the government did not implement any changes to the ruble’s exchange
Words: 2376 - Pages: 10
I. HISTORY OF DEVALUATION OF INDIAN RUPEE (INR) AND ITS IMPACTS ON INDIAN ECONOMY In a fixed exchange rate regime the term ‘Devaluation’ is used. It means a deliberate downward adjustment of a country's official exchange rate by its government i.e. central bank (RBI in India) relative to other currencies; Where as in floating or fluctuating exchange rate currency's
Words: 16590 - Pages: 67
