Course Project

Introduction
Continuing your creation of a MNC, consider the decisions that you made in previous weeks and add to your company using the prompts below.

Activity Instructions
Provide answers to the following MNC components using both information and concepts from the text as well as outside research to support your statements and probable MNC success. You might organize your paper using the headings and statements below to make sure you include all of the appropriate information.

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Recognizing Exposure to Exchange Rate Risk
Recall that when you created your business idea, it was assumed that your receivables would be denominated in the foreign currency of concern upon the sale of your products. Describe your exposure to exchange rate risk. That is, describe the exchange rate conditions affecting the performance of your business.
Is your business subject to transaction exposure? Economic exposure? Translation exposure? Explain why your business is or is not subject to each of these types of exposure.
Establishing a Subsidiary in Foreign Country
Assuming that your international business is successful, identify reasons why it may be feasible to establish a small subsidiary in the foreign country rather than continue exporting.
Identify the disadvantages associated with establishing a small subsidiary in the foreign country of concern.

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