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  • International Financial Management: Presented By: Tan Kock Lim Wan Sharinee Seraj Kiumarsi

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    This document discusses various topics in international financial management including: 1) Techniques to manage transaction exposure such as forward contracts, futures contracts, and options hedges that businesses can use to mitigate risks from exchange rate fluctuations on future cash flows. 2) Capital budgeting techniques available to international businesses like NPV, IRR, payback period, that can be used to analyze foreign investment projects. 3) The key difference between interest rate swaps and currency swaps - an interest rate swap allows changing the nature and cost of interest obligations while a currency swap changes the currency of a firm's debt.

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    This document discusses various topics in international financial management including: 1) Techniques to manage transaction exposure such as forward contracts, futures contracts, and options hedges that businesses can use to mitigate risks from exchange rate fluctuations on future cash flows. 2) Capital budgeting techniques available to international businesses like NPV, IRR, payback period, that can be used to analyze foreign investment projects. 3) The key difference between interest rate swaps and currency swaps - an interest rate swap allows changing the nature and cost of interest obligations while a currency swap changes the currency of a firm's debt.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    12 views11 pages

    International Financial Management: Presented By: Tan Kock Lim Wan Sharinee Seraj Kiumarsi

    Uploaded by

    wan rinee wan yahaya
    This document discusses various topics in international financial management including: 1) Techniques to manage transaction exposure such as forward contracts, futures contracts, and options hedges that businesses can use to mitigate risks from exchange rate fluctuations on future cash flows. 2) Capital budgeting techniques available to international businesses like NPV, IRR, payback period, that can be used to analyze foreign investment projects. 3) The key difference between interest rate swaps and currency swaps - an interest rate swap allows changing the nature and cost of interest obligations while a currency swap changes the currency of a firm's debt.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
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    of 11

    International Financial

    Management
    Presented By:

    Tan Kock Lim


    Wan Sharinee
    Seraj Kiumarsi

    Powerpoint Templates
    Powerpoint Templates Page 1
    Agenda
    a) Problems in financing and arranging
    payment
    b) Methods of payment
    c) Trade acceptance vs. banker’s
    acceptance
    d) Techniques to reduce transaction
    exposure
    e) Currency netting operations in MNC
    f) Capital budgeting techniques
    g) Interest swap vs. Templates
    Powerpoint currency swap Page 2
    Transaction Exposure?

    exists when future cash transactions of


    a firm are affected by exchange rate
    fluctuations
    Sime Darby Berhad a Malaysian
    business who exports palm oil to India
    for future payments in Rupees is faced
    with the risk of Rupees depreciate
    against the RM when the payment is
    made.

    Powerpoint Templates Page 3


    Techniques for Managing
    Transaction Exposure
    • Forward Contracts
    • Future Contracts
    • Options Hedge
    • Go Uncovered

    Powerpoint Templates Page 4


    Question F
    What capital budgeting techniques are
    available to international business?
    • Accounting Rate of Return (ARR)
    • Net Present Value (NPV)
    •Payback Period (PP)
    •Discounted payback period (DPP)
    •Profitability Index(PI)
    •Internal Rate of Return(IRR)
    • Modified Internal Rate of Return (MIRR)

    Powerpoint Templates Page 5


    Question G
    What is the difference between an interest swap and
    currency swap?
    Interest rate swap definition
    Currency swap definition
    The difference between the interest rate swap and
    currency swap
    •Interest swap may include more than two parties
    •In interest rate the criteria for determining the rate is based on a
    benchmark
    •In interest rate one party rate is fixed while the other is floating
    •In currency swap there is an exchange of principal amount
    ****An interest rate swap allows firms to change the nature and cost of a
    firm’s interest obligations, while a currency swap is undertaken to change the
    currency in which the firm’s debt is denominated.

    Powerpoint Templates Page 6


    Powerpoint Templates Page 7
    Powerpoint Templates Page 8
    Powerpoint Templates Page 9
    Powerpoint Templates Page 10
    Powerpoint Templates Page 11

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