International Project Valuation: A Capital Budgeting Decision
In order to compete with heighted international competition, companies must diversify their operations into foreign markets. Baylor’s I5 program serves to facilitate the expansion efforts of these companies by providing them with innovative projects, market research, and consultation. This thesis is intended to provide the students of the program with a guide on approaching the finance portion of their responsibilities. The guide is split into two parts. Part One explains how hyper-competition and a global economy have affected business’ competitive landscape. It explains how various companies have responded by expanding internationally via different modes of entry. Part Two examines how to determine the financial health of a business. Next, the guide leads the students through a financial valuation of an international capital budgeting decision. Lastly, the guide explains how to interpret the results through the perspective of a potential lender who will finance the project.