Editorial Universo

Description

This case analyzes a direct investment in Brazil by a medium-sized Spanish company. It outlines the quantitative and qualitative reasons behind this decision, the possible future cash flow scenarios, the issues that might arise and how negative cash flow in the subsidiary may affect positive cash flow in the parent company. It takes into account the financial solvency - though not very considerable - of the parent company, which, when presented with the possibility of making an acquisition in Brazil, rises to the occasion. The IRR of the project is calculated, the different sources of financing for a direct foreign investment are studied, and, finally, the financing option chosen is critically analyzed.

Learning Objective

The case is intended to introduce participants to: - The criteria to keep in mind when making a foreign investment; - The potential sources of financing for a project of this kind; - And the advantages and risks this type of investment entails.

Related Documents

• Multilateral Financing
• La financiación multilateral

Keywords

Balance Sheet Analysis Decision-Making Analysis Family-owned Business Financial analysis International Expansion International trade project analysis