New Plant for Houston Marine Electronics: International Finance Case on International Capital Budgeting
10 Pages Posted: 12 Jul 2013 Last revised: 29 Jun 2017
Date Written: March 28, 2017
Houston Marine Electronics is a hypothetical United States manufacturer needing to decide in 2013 whether to build a new plant to supply surging product demand in Australia. If so, the company must also decide whether to locate the plant in the United States or Australia. The case focuses on issues related to country risk, currency risk, and the cost of capital.
Keywords: Foreign Exchange, International Capital Budgeting, Cost of Capital, Country Risk, Operational Hedging
JEL Classification: G31, G32
Suggested Citation: Suggested Citation