INT 620 Final Project Guidelines and Rubric
Overview
The final project for this course is the creation of a Foreign Exchange Rate Risk Management in
Multinational Enterprise in Business Strategy. You will examine how a multinational enterprise (MNE)
uses foreign exchange risk management in its business strategy.
The final project for this course consists of two major components. The first component is a Case Study
Briefing document that focuses on a case study of foreign exchange risk management techniques
currently used in a multinational enterprise (MNE). You will complete a briefing document in Module
Five that focuses on the risk management techniques currently used in the MNE that you have chosen.
Within this document, you will address the background and nature of the company’s business, the
exposure to foreign exchange rate the company faces (i.e., through its accounts payable because it
imports, through its accounts receivable because it exports, or through both accounts), and the tools or
techniques the company currently uses to mitigate those risks (i.e., the company uses foreign debt to
hedge the currency exposure, using derivatives such as currency swaps, futures, forwards, or options,
for only a certain number of months to hedge only a certain percentage of the exposure, etc.).
The second component is a Subsidiary Expansion or an Investment document that focuses on your
research to expand this MNE into a new country. The country could be the country in which the MNE is
currently located. Or, it could be any country that you are interested in expanding into. Within this
document, you will address the capital structure of the new subsidiary and, if the company has debt
financing, from where or which currency you would get the debt financing, and why.
Once the company
breaks even and starts making a profit, how would you manage the profit (i.e., need to invest for
expansion for growth or because of restrictions on blocked funds, repatriate back to the mother
company annually because you are not certain of the country and currency risk, etc.)?
The project is divided into two milestones, which will be submitted at various points throughout the
course to scaffold learning and ensure quality final submissions. These milestones will be submitted in
Modules One and Five. The final submission will be in Module Nine.
In this assignment, you will demonstrate your mastery of the following course outcomes:
Analyze the fundamentals of foreign exchange risk management in mitigating corporate risk
Interpret exchange rate movements when assessing the foreign exchange risk on the
corporation by examining the institutional structure and
mechanisms of foreign exchange markets
Evaluate the financial and strategic impact of foreign exchange risk on the corporation for
shaping future risk management and funding strategies
Analyze how the dynamics of global capital markets shape the foreign exchange market for
determining funding strategies and mitigating corporate risk
Propose appropriate international capital budgeting strategies for managing multinational
corporations’ international monetary relationships
Prompt
Multinational corporations (MNEs) operate globally with several established subsidiaries in foreign
countries. In this project, you will choose an MNE. You will then download the company’s annual report
and analytically research the company to understand its current foreign exchange rate exposure, and
the tools or techniques the company uses to mitigate the risks. Moreover, you will choose a country in
which you will expand your presence and create a new subsidiary. You will need to identify your capital
structure for your new subsidiary, as well as plan for your profit repatriation.
Resources to consider:
Corporate Income Tax Rates Around the World, 2014
KPMG: Corporate Tax Rates Table
Country and Lending Groups
World Trade Organization: Statistics Database
U.S. Free Trade Agreements
How Much Do U.S. Multinational Corporations Pay in Foreign Income Taxes?
Global Financial Development
International Debt Statistics
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