International Investment

The international investment consists of a procedure for evaluating the foreign investment opportunities.

(i)    Identification of Cash Flow:

The operating cash flow is expressed as profit after tax payable on dividends, tax payable on interest, tax payable on royalty,plus the incremental depreciation which other non-cash charges.

(ii)    Choice of discount Rate:

The discount rate to foreign investment will be higher than that of domestic investment. The choice of discount rate is subject to a degree of risk which motivates firm to require higher rate of return.

(iii)    Determinations of Net Present Value:

The approach preferred for international investment is the adjusted present value method which can be used for evaluating a profit.

For more help in International Investment click the button below to submit your homework assignment