International Finance MGMT-61500

Mary Abrokwa Kofo Adafin Joseph Ahlersmeyer Ted Daniels Rachel Hill Jamie Pearson

Agenda
Project Overview International Risk Calculating Risk Premium Calculating Hurdle Rate Discounted Cash Flows DCF with Risk Premium Repatriation Project Choice Funding Caveats Conclusion Q&A

International Risk
Project Overview International Risk Calculating Risk Premium Calculating Hurdle Rate Discounted Cash Flows DCF with Risk Premium Repatriation Project Choice Funding Caveats Conclusion Q&A

Turkey
High current account deficit Uncertain monetary policy making Political turmoil Bribery Terrorism

Colombia
Historically high inflation Dependence on oil exports Infrastructure deficiencies Strained relations with countries

Risk Premium
Project Overview International Risk Calculating Risk Premium Calculating Hurdle Rate Discounted Cash Flows DCF with Risk Premium Repatriation Project Choice Funding Caveats Conclusion Q&A

Hurdle Rate
Project Overview International Risk Calculating Risk Premium Calculating Hurdle Rate Discounted Cash Flows DCF with Risk Premium Repatriation Project Choice Funding Caveats Conclusion Q&A

Cash Flow Analysis

Project Overview International Risk Calculating Risk Premium Calculating Hurdle Rate Discounted Cash Flows DCF with Risk Premium Repatriation Project Choice Funding Caveats Conclusion Q&A

Turkey
IRR Spot Rate NPV 20.2 % 1.78 lira /$ $172,513,532

Colombia
16.6 % 1795 pesos /$ $125,559,024

DCF with Risk Premium

Turkey Country Risk Premium Revised WACC Adjusted NPV 3.6 % 9.43 % $99,143,528 Colombia 3.0 % 7.62 % $80,310,647

Cash Flow Analysis

Project Overview International Risk Calculating Risk Premium Calculating Hurdle Rate Discounted Cash Flows DCF with Risk Premium Repatriation Project Choice Funding Caveats Conclusion Q&A

Turkey IRR with Repatriation

NPV with Repatriation NPV

Colombia

Project Choice
Project Overview International Risk Calculating Risk Premium Calculating Hurdle Rate Discounted Cash Flows DCF with Risk Premium Repatriation Project Choice Funding Caveats Conclusion Q&A

Intercompany Loans
Taxation

Third Party Loans FX Risk Colombia project is more profitable

Caveats
Project Overview International Risk Calculating Risk Premium Calculating Hurdle Rate Discounted Cash Flows DCF with Risk Premium Repatriation Project Choice Funding Caveats Conclusion Q&A

Uncertainty of Cash Flows

Country Risk Miscalculation Bankruptcy Contract Enforcement Negotiation for higher BFCs. Industry Risk / Regulations Contract Enforcement Natural Disasters

Conclusion
Project Overview International Risk Calculating Risk Premium Calculating Hurdle Rate Discounted Cash Flows DCF with Risk Premium Repatriation Project Choice Funding Caveats Conclusion Q&A

Q&A
Project Overview International Risk Calculating Risk Premium Calculating Hurdle Rate Discounted Cash Flows DCF with Risk Premium Repatriation Project Choice Funding Caveats Conclusion Q&A